Which of the following is true of lags associated with discretionary policy?
A) Such lags extend only from the time a problem occurs in an economy to the time it is recognized by the government.
B) Such lags extend only from the time a problem is recognized by the government to the time an agreed-on policy is approved of.
C) Such lags extend only from the time a policy is approved to the time the policy is implemented.
D) Such lags can be reduced by taxation.
E) Such lags extend only from the time a problem occurs in an economy to the time a corrective policy has an impact on the economy.

Question

Quizplus · Accepted Answer

The lags associated with discretionary policy refer to the time it takes for a corrective policy to have an impact on the economy. They extend from the time a problem occurs to the time a policy has an impact. These lags cannot be reduced by taxation or any other means, as they are inherent to the process of implementing a policy.

Which of the Following Is True of Lags Associated with Discretionary