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

Question

Quizplus · Accepted Answer

The impact of an increase in the money supply usually takes time to filter through the economy, as it affects spending and investment decisions. This lag is commonly estimated to be between 6-18 months, as it takes time for individuals and businesses to adjust their behavior in response to the new monetary conditions. Therefore, Choice C is the best answer.

An Increase in the Money Supply Can Typically Affect the Economy