In: Economics
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. |
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.