The existence of lags prevents the instantaneous adjustment of the economy to policies changing aggregate demand,thereby strengthening the case for
A)supply-side policy.
B)nonactivists.
C)activists.
D)demand-management policy.

Question

Quizplus · Accepted Answer

Nonactivists argue that due to the existence of lags, the economy should be left to adjust on its own rather than relying on active policy interventions, which may be mistimed and potentially destabilizing.

The Existence of Lags Prevents the Instantaneous Adjustment of the Economy