Answered

Which of these is an example of inside lag in monetary policy?

ACongress debates funding new highways.
BBanks hold more reserves than they are required.
CThe Fed lowers interest rates several months into a recession.
DCorporations expand years after the Fed lowers interest rates.

Verified Answer :

W0lf93

The correct answer is C. The Fed lowers interest rates several months into a recession. It's a lag because they could've done it sooner and helped with the recession sooner but decided not to and thus they created a lag in monetary policy of a federation. It's like if the congress refused to help with the recession for no reason for a few months.

maldecido
CThe Fed lowers interest rates several months into a recession.   wolf93 is correct.

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