When studying the effects of changes in public policy,economists believe that
A)it is important to distinguish between the short run and the long run.
B)the assumptions used in studying those effects should be the same for the short run as for the long run.
C)the short-run effects of those changes are always more beneficial to society than are the long-run effects.
D)the long-run effects of those changes are always more beneficial to society than are the short-run effects.

Question

Quizplus · Accepted Answer

Economists believe that it is important to distinguish between the short run and the long run when studying the effects of changes in public policy because the short-run effects may differ from the long-run effects. In the short run, some groups may benefit while others may be adversely affected, while in the long run, the overall effects may be different as the economy adjusts to the changes in policy. Therefore, economists need to analyze both the short-run and long-run effects of public policy changes to better understand their impact on society. Option B is incorrect because the assumptions used in studying short-run effects may not be relevant for the long run. Options C and D are incorrect because the benefits of public policy changes in the short run or long run depend on the specific policy and its effects on the economy.

When Studying the Effects of Changes in Public Policy,economists Believe