Which of the following is one reason that long time lags hamper the effectiveness of economic policy?
A) because the longer unemployment lasts, the more intense inflation becomes
B) because by the time the impact of a policy is felt, a new problem may have come along that requires a different policy, which may make the situation even worse
C) because if inflation is allowed to continue for too long, it becomes immune to policy interference
D) because if unemployment is allowed to continue for too long, it becomes immune to policy interference

Question

Which of the following is one reason that long time lags hamper the effectiveness of economic policy?  
A) because the longer unemployment lasts, the more intense inflation becomes 
B) because by the time the impact of a policy is felt, a new problem may have come along that requires a different policy, which may make the situation even worse 
C) because if inflation is allowed to continue for too long, it becomes immune to policy interference 
D) because if unemployment is allowed to continue for too long, it becomes immune to policy interference

Quizplus · Accepted Answer

Long time lags hamper the effectiveness of economic policy because by the time the impact of a policy is felt, a new problem may have come along that requires a different policy, which may make the situation even worse. Thus, long time lags make it difficult to address current economic issues in a timely and effective manner. The other options (A, C, and D) are not accurate reasons for why long time lags hamper the effectiveness of economic policy.

Which of the Following Is One Reason That Long Time