Question

g assume it takes the fed 4 months to understand that a demand shock has occurred in the economy, and another 1 month to adjust policy to the shock. the initial 4 month time period refers to the

Answer 1

The answer is recognition lag

Step-by-step explanation:

Recognition lag can be found in monetary policy and is the amount of time it takes a national government to react or respond to an economic shock, such as a sudden boom or bust.

Some types of policy lags include: decision lag, implementation lag and recognition lag.