Estimates from large macroeconometric models of the U.S. economy suggests that it takes over ________ for monetary policy to affect output and over ________ for monetary policy to affect the inflation rate.
A)1 year;2 years
B)2 years;1 year
C)1 year;6 months
D)6 months;1 year

Question

Quizplus · Accepted Answer

Monetary policy typically takes over 1 year to affect output and over 2 years to affect the inflation rate. This reflects the time lags in the transmission mechanism of monetary policy through the economy.

Estimates from Large Macroeconometric Models of the U