Why is there a lag between the Fed's actions and the economy's response?
Monetary policy is supposed to work by changing interest rates. However, people often make spending plans well in advance. So, it may take time for them to alter their decisions.
Economics
You might also like to view...
In what ways does a certificate of deposit (CD) differ from a savings deposit?
What will be an ideal response?
Economics
Since the 1980s, China's output per person has increased tremendously. Which of these possible contributors to economic growth in China is a good example of a positive supply shock?
A) high levels of saving and investment B) declining rate of population growth C) rising consumption of energy D) all of the above E) none of the above
Economics