The time between when Federal Reserve policymakers decide to close an output gap and when they act to change the fed funds rate is an example of:

Question

Quizplus · Accepted Answer

The time delay between when policymakers decide to change the fed funds rate and when they actually implement the change is known as the inside lag. This delay can be caused by various factors such as the time it takes for the fed funds rate to have an effect on the economy, the time required to gather and analyze economic data, and the complexity of decision-making within the Federal Reserve system. Therefore, the correct answer is option D.

The Time Between When Federal Reserve Policymakers Decide to Close