Which statement(s) is/are TRUE? I. The decision lag is typically longer than the information lag.
II) Lags associated with the crafting and implementation of discretionary fiscal policy can lead to destabilizing impacts on the economy.
III) Data has been collected, trends identified, and an appropriate discretionary policy has been approved, leaving only the delay related to implementation preventing the policy from having an impact on the economy.

Question

Quizplus · Accepted Answer

I. The decision lag, which is the time it takes for policy makers to recognize a problem and decide on an action, is often longer than the information lag, which is the time it takes to collect and analyze economic data. II. The lags in recognizing economic issues, deciding on a policy response, and then implementing that policy can indeed lead to actions that are mistimed, potentially exacerbating economic fluctuations rather than smoothing them. III. This statement describes the implementation lag, which is the final delay before a policy takes effect after it has been designed and approved.

Which Statement(s) Is/are TRUE? I