Refer to the information provided in Figure 14.1 below to answer the questions that follow. Figure 14.1
-Refer to Figure 14.1. If the condition of the economy at point E is realized by policy makers when the economy is at point G, policy is likely to be inappropriate due to
A) crowding out.
B) the recognition lag.
C) the implementation lag.
D) the response lag.

Question

Refer to the information provided in Figure 14.1 below to answer the questions that follow.  Figure 14.1
-Refer to Figure 14.1. If the condition of the economy at point E is realized by policy makers when the economy is at point G, policy is likely to be inappropriate due to
A) crowding out. 
B) the recognition lag. 
C) the implementation lag. 
D) the response lag.

Quizplus · Accepted Answer

The recognition lag refers to the time it takes for policy makers to realize that the economy has moved from one point to another (in this case, from G to E). This delay can lead to inappropriate policy decisions because actions are based on outdated information.

Refer to the Information Provided in Figure 14