Which of the following is true of lags associated with discretionary policy?
A)Such lags extend only from the time a problem occurs in the economy through the time it is recognized by the government.
B)Such lags extend only from the time a problem is recognized by the government through the time an agreed-on policy is approved of.
C)Such lags extend only from the time a policy is approved through the time the policy is implemented.
D)Such lags can be reduced by taxation.
E)Such lags extend only from the time a problem occurs in the economy through the time a corrective policy has an impact on the economy.

Question

Quizplus · Accepted Answer

Lags associated with discretionary policy refer to the time it takes for the government to recognize a problem in the economy, formulate a policy to address the problem, and implement the policy. These lags can only be reduced by implementing a policy that has an impact on the economy from the time the problem occurs to the time the corrective policy is implemented. Therefore, the correct answer is E.

Which of the Following Is True of Lags Associated with Discretionary