Which of the following is NOTcharacteristic of monetary policy? A. Recognition lag. B. Operational lag. C....

Which of the following is NOTcharacteristic of monetary policy?

	A.	Recognition lag.
	B.	Operational lag.
	C.	Administrative lag.
	D.	All of the above are characteristic of monetary policy.

Solutions

Expert Solution

Answer- (D) All of the above are characteristics of monetary policy.

This is because all three Recognition lag, Operational lag and Administrative lag are part of monetary policy.

Recognition lag- It is the amount of time it takes for monetary authorities to recognize a problem in the economy. Effectiveness lag is the amount of time it takes for a monetary policy's effects to produce the desired result.

Operational lag- It signifies a time interval that a policy or an action takes to have an impact on the income or other business operations.

Administrative lag- This lag is very short. It varies with the type of monetary policy being considered and the decision making process of the monetary authority.

Rahul Sunny answered 1 year ago

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