It might take a while before the effects of changes in monetary policy are realized in the economy because it takes a while for

Question

Quizplus · Accepted Answer

Investment expenditures and net exports take time to adjust as businesses and individuals need to make decisions based on the new interest rates and changes in the money supply. Government purchases may not be affected by changes in monetary policy. The exchange rate can adjust relatively quickly, but it is not the only factor in the economy. Open-market operations are a tool used to implement monetary policy, but the effects may not be immediate. Interest rates can take time to adjust, especially in the case of longer-term rates which reflect market expectations about future economic conditions.

It Might Take a While Before the Effects of Changes