Suppose that policymakers are concerned about a shortage of long-term capital investment.To remedy the problem, the policymakers have suggested various plans to cut capital gains taxes.What term refers to the delay that is incurred while a plan is being selected?
A) implementation lag
B) decision-making lag
C) recognition lag
D) effectiveness lag

Question

Suppose that policymakers are concerned about a shortage of long-term capital investment.To remedy the problem, the policymakers have suggested various plans to cut capital gains taxes.What term refers to the delay that is incurred while a plan is being selected?  
A) implementation lag 
B) decision-making lag 
C) recognition lag 
D) effectiveness lag

Quizplus · Accepted Answer

The delay incurred while a plan is being selected is known as the decision-making lag, as policymakers need to weigh the pros and cons of different options before making a decision. The implementation lag refers to the time that it takes for a policy to be put into effect after it has been decided upon, the recognition lag refers to the time it takes for policymakers to identify the problem and the effectiveness lag refers to the time it takes for the policy to have a measurable effect on the economy.

Suppose That Policymakers Are Concerned About a Shortage of Long-Term