The time between when the fed funds rate is cut and when investment spending increases is an example of:
A)Okun's law.
B)the outside lag of macroeconomic policy.
C)anchoring inflationary expectations.
D)the inside lag of macroeconomic policy.

Question

Quizplus · Accepted Answer

The outside lag of macroeconomic policy refers to the time it takes for a policy action, like a change in the fed funds rate, to affect the economy, such as increasing investment spending.

The Time Between When the Fed Funds Rate Is Cut