Economists at the Bank of Canada estimate that time lags in monetary policy imply that
A) monetary policy is totally ineffective in changing overnight lending rates in the short run.
B) monetary policy is totally ineffective in changing core inflation rates in the long run.
C) monetary policy can cause changes in real GDP to occur in 9-12 months and changes in core inflation to occur in 18-24 months.
D) monetary policy can cause changes in core inflation to occur in 9-12 months and changes in the exchange rate to occur in 18-24 months.
E) monetary policy can cause changes in core inflation to occur in 9 to 12 months and changes in real GDP to occur in 18-24 months.
Correct Answer:
Verified
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