Respuesta :
The time between when a recession begins and when the central bank lowers interest rates to stimulate aggregate demand is an example of an inside lag of monetary policy. (Option D)
What is inside lag?
The time it takes for a government or central bank to react to an economic shock is known as the inside lag (or inside recognition and decision lag) in economics. It is the postponement of the execution of a monetary or fiscal policy.
In conclusion, internal lags cause delays in the execution of a policy since it takes time to pinpoint the issue and more time to put monetary measures into place. The central bank's or the government's delay in responding to the country's economic shock is referred to as the outer lag, in comparison.
Learn more about inside lag here: https://brainly.com/question/10576646
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The complete question can be found below:
The time between when a recession begins and when the central bank lowers interest rates to stimulate aggregate demand is an example of an:
A. inside lag of fiscal policy.
B. outside lag of fiscal policy.
C. outside lag of monetary policy.
D. inside lag of monetary policy.
Answer: Option D
