Time lags associated with policy decision making and implementation suggest that:
A) increases in spending to fight a recessionary gap can be timed correctly.
B) increases in spending to fight a recessionary gap may occur too early.
C) increases in spending to fight a recessionary gap may occur too late.
D) most information is old before the public is aware of it.

Question

Quizplus · Accepted Answer

Time lags associated with policy decision making and implementation suggest that increases in spending to fight a recessionary gap may occur too late. This is because by the time a government recognizes that there is a recessionary gap and decides on the appropriate policy response, it may take some time for the policy to be implemented and have an effect on the economy. This delay can result in the policy response being implemented after the recessionary gap has already worsened, which could lead to negative economic consequences.

Time Lags Associated with Policy Decision Making and Implementation Suggest