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 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 29.1 below to answer the question(s) that follow.  Figure 29.1
-Refer to Figure 29.1. 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 delay in identifying the current economic condition, which can lead to inappropriate policy decisions if policymakers misjudge the economy's position.

Refer to the Information Provided in Figure 29