Refer to the information provided in Figure 29.1 below to answer the question(s) that follow. Figure 29.1
-Refer to Figure 29.1. If policy makers decide on a policy at point t₃ but it does not affect the economy until period t₆, then the policy choice is likely to be

Question

Refer to the information provided in Figure 29.1 below to answer the question(s) that follow.

Figure 29.1
-Refer to Figure 29.1. If policy makers decide on a policy at point t₃ but it does not affect the economy until period t₆, then the policy choice is likely to be

Quizplus · Accepted Answer

If the policy makers implement a policy at point t₃ but it only affects the economy at period t₆, then it is likely that the policy will have a destabilizing effect on the economy. This is because by the time the policy takes effect, the economy may have already moved away from the original position at t₃, rendering the policy ineffective or even counterproductive. Therefore, it is important for policy makers to take into account the timing of their policy decisions and their potential impact on the economy.

Refer to the Information Provided in Figure 29