Monetary policy produces ripple effects, some of which happen quickly and some that can take years to produce change. Which of the following takes the longest to change ?
A) exchange rate
B) monetary base
C) inflation rate
D) federal funds rate

Question

Quizplus · Accepted Answer

Inflation rate takes the longest to change because it is a measure of the overall price level in the economy, and changes in prices can take time to filter through the entire economy. Changes in the exchange rate, monetary base, and federal funds rate can all have more immediate effects.

Monetary Policy Produces Ripple Effects, Some of Which Happen Quickly