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.

Question

Quizplus · Accepted Answer

The impact lag facing the Fed refers to the time required for monetary policy changes to affect output, employment, and prices. This means that even after the Fed implements a new policy, there may be a delay before it has the desired effect on the economy. The other answer choices are not accurate descriptions of the impact lag.

The Impact Lag Facing the Fed Is