Monetary policy
A)can be implemented quickly and most of its impact on aggregate demand occurs very soon after policy is implemented.
B)can be implemented quickly, but most of its impact on aggregate demand occurs months after policy is implemented.
C)cannot be implemented quickly, but once implemented most of its impact on aggregate demand occurs very soon after policy is implemented.
D)cannot be implemented quickly and most of its impact on aggregate demand occurs months after policy is implemented.

Question

Quizplus · Accepted Answer

Monetary policy can be implemented quickly, but it takes some time for the impact on aggregate demand to be felt. This is because it takes some time for individuals and businesses to adjust their spending and investment decisions in response to changes in interest rates or money supply. The lag can range from a few months to a year, depending on the specific circumstances and the effectiveness of the policy.

Monetary Policy