The time period that it takes for companies to increase output of commodities for which demand has increased due to currency depreciation is known as the:
A) Recognition lag
B) Decision lag
C) Replacement lag
D) Production lag

Question

Quizplus · Accepted Answer

The time period that it takes for companies to increase output of commodities due to currency depreciation is known as the production lag, as it takes time for companies to adjust their production process and increase output. The recognition lag refers to the time it takes for policymakers to recognize changes in the economy, the decision lag refers to the time it takes for policymakers to implement policy changes, and the replacement lag refers to the time it takes for old equipment to be replaced with new equipment.

The Time Period That It Takes for Companies to Increase