The impact lag facing the Fed is
A) the delay before open market operations are able to affect the monetary base.
B) the delay before the Fed's announcement of a new policy has an impact on the decisions of the public.
C) the time required for monetary policy changes to affect output, employment, and prices.
D) the delay before the impact of a recession on output and prices becomes clear to the Fed.
C
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Which of the following combinations would not produce conflicting effects on the supply of money? a. The Fed pays a higher interest rate on bank reserves and increases the required reserve ratio
b. The Fed conducts an open market purchase and lowers the discount rate. c. The Fed pays a higher interest rate on bank reserves and conducts an open market sale of government securities. d. None of the above would produce conflicting effects on the supply of money
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease