An outside lag in monetary policy is caused in part by the long and variable tim

Question

An outside lag in monetary policy is caused in part by the long and variable times it takes for the Fed to carry out open market operations. is caused by the time it takes to build public-funded construction projects. could be caused by the time it takes banks to identify and investigate the credit-worthiness of new loan customers. could be caused by the time it takes the Fed to realize what things have changed in the economy. Annalise decides to start a bank. She contributes dollar 100 to the business. That is, at the start, her equity in the bank is dollar 100. She opens her doors for business, and initially attract dollar 900 of deposits. She keeps dollar 45 in her new vault as reserves and loans out the remaining dollar 955 in loans. If 10 percentage of the loans she's made fail to repay, her bank is bankrupt. her equity in the bank has fallen to dollar 4.50. her equity in the bank is still dollar 100. her equity/loan ratio has increases. 3. FBN ("Fly by Night

Explanation / Answer

1. The correct option is (a)

Explanation:  The outside lag is the amount of time it takes for a government or central bank's actions, in the form of either monetary or fiscal policy, to have a noticeable effect on the economy

2. The correct option is (c); her equity in the bank is still $100

3. The correct option is (d) ; commercial banks make loans to many companies and individuals

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