Lags in stabilization policy refer to delays between the time when the need for stabilization policy arises and the time when the policy has its actual effects on the economy.

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This statement correctly describes lags in stabilization policy. There are three types of lags: recognition lags, which refer to the time it takes to recognize that the economy needs stabilization policy; implementation lags, which refer to the time it takes to put the policy into action; and impact lags, which refer to the time it takes for the policy to have its full effect on the economy. These lags can lead to difficulties in implementing effective stabilization policies.

Lags in Stabilization Policy Refer to Delays Between the Time