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Which of the following lags does monetary policy face? (More than one answer may be correct.)
Multiple select question.

Operational

Administrative

Recognition

Investment

1 answer

Monetary policy faces the following lags:

  1. Recognition Lag - This is the time it takes for policymakers to recognize that a significant economic issue is occurring that requires intervention.

  2. Operational Lag - This refers to the time it takes for monetary policy actions to have an effect on the economy after the policy is implemented.

The Investment Lag and Administrative Lag are not typically categorized as lags faced by monetary policy in the same way the recognition and operational lags are.

Therefore, the correct answers are: Operational and Recognition.