The lag between the time that the money supply is increased and the time that investment expenditures increase is an example of a:
A)fiscal inside lag. fiscal
B)outside lag. monetary
C)inside lag. monetary
D)outside lag.

Question

Quizplus · Accepted Answer

The lag between increasing the money supply and investment expenditures increasing is typically referred to as the monetary policy outside lag. This is because it takes time for changes in the money supply to work their way through the economy and have an impact on investment spending. None of the other choices accurately describe this lag.

The Lag Between the Time That the Money Supply Is