An increase in the money supply can typically affect the economy with a lag of:
A) 2 to 3 months.
B) 4 to 10 months.
C) 6 to 18 months.
D) 10 to 24 months.

Question

Quizplus · Accepted Answer

The increase in the money supply typically affects the economy with a lag of 6 to 18 months. This is because it takes time for the increased money supply to be spent and circulate throughout the economy, impacting prices and economic activity. The lag can vary depending on factors such as the velocity of money, the level of interest rates, and the overall economic conditions.

An Increase in the Money Supply Can Typically Affect the Economy