Policy time lags can cause difficulties for policy makers because:
A) the size of the multiplier cannot be known with certainty
B) it is difficult for policy makers to agree which policy is best at a point in time
C) by the time the policies take effect the nature of the economic problem may have changed
D) by the time the policies take effect the economy will have self- corrected

Question

Quizplus · Accepted Answer

Policy time lags mean that there is a delay between the implementation of a policy and its effects on the economy. During this delay, the economic situation may change, making the policy less effective or even counterproductive by the time it takes effect.

Policy Time Lags Can Cause Difficulties for Policy Makers Because