The time it takes for a particular monetary policy to change income is called the _____.
A)recognition lag
B)data lag
C)reaction lag
D)effect lag
E)action lag

Question

Quizplus · Accepted Answer

The effect lag is the time it takes for a change in monetary policy to have an impact on the economy, specifically on income or output. The recognition lag refers to the time it takes for policymakers to recognize the need for a change in policy, the data lag refers to the time it takes to gather and analyze relevant data, the reaction lag refers to the time it takes for the policy to have an effect on interest rates, and the action lag refers to the time it takes for policymakers to implement the policy once it has been decided upon.

The Time It Takes for a Particular Monetary Policy to Change