The lag between the time at which a policy is put in place and the time that policy affects the economy is called
A) the recognition lag.
B) the impact lag.
C) the implementation lag.
D) the theoretical lag.

Question

Quizplus · Accepted Answer

The lag between implementation of policy and its impact on the economy is called the impact lag. The recognition lag refers to the time it takes for policymakers to recognize a problem or issue, while the implementation lag refers to the time it takes for the policy to be put into effect. The theoretical lag is not a commonly used term in economics.

The Lag Between the Time at Which a Policy Is