________ that often erode effectiveness of monetary and fiscal policy measures represent delays in the response of the economy to stabilization policy.
A) High inflation levels
B) High unemployment levels
C) Time lags
D) Negative business cycles

Question

Quizplus · Accepted Answer

Time lags refer to the delays between the implementation of a stabilization policy measure and its actual effects on the economy, which can reduce the effectiveness of monetary and fiscal policies. High inflation levels and high unemployment levels are economic conditions that stabilization policies are intended to address, while negative business cycles are typically the result of broader economic changes and are not directly related to policy implementation.

________ That Often Erode Effectiveness of Monetary and Fiscal Policy