Monetary Policy Affects the Economy with a Long Lag, in Part

Multiple Choice

Monetary policy affects the economy with a long lag, in part because

A) proposals to change monetary policy must go through both the House and Senate before being sent to the president.
B) monetary policy works through changes in interest rates, and the Fed does not have the ability to change interest rates quickly.
C) changes in interest rates primarily influence consumption spending, and households make consumption plans far in advance.
D) changes in interest rates primarily influence investment spending, and firms make investment plans far in advance.