Monetary Policy: End of Chapter Problem A "shock duration" is how long a velocity shock itself will last. This duration is predicted by the Fed. After that time, velocity growth will go back to its old level. Additionally, the Fed also estimates how many months it will take for a change in money supply to actually push AD in the desired direction. This is called the "monetary lag." The question is quite simple: In which of these cases should the Federal Reserve change money growth? Shift in money growth is stabilizing Shift in money growth is destabilizing Answer Bank a. monetary lap: 14 monthas shock duration; & months b. monetary lag: 18 months; thick duration 12 months C. imonetary lag. 10 months shock duration permanent d. monetary lag: 12 montha; shock duration: 24 months e. monetary lap; The moolless shock duration: 9 months T. monetary lap: 10 months, shock duration: permanent monetary lag' I8 months; houck duration: permanent