Refer to the information provided in Figure 15.1 below to answer the questions that follow.
Figure 15.1
-Refer to Figure 15.1.If policy makers decide on a policy at point t₃ but it does not affect the economy until period t₆,then the policy choice is likely to be

Question

Refer to the information provided in Figure 15.1 below to answer the questions that follow.

Figure 15.1
-Refer to Figure 15.1.If policy makers decide on a policy at point t₃ but it does not affect the economy until period t₆,then the policy choice is likely to be

Quizplus · Accepted Answer

If the policy choice at point t₃ does not affect the economy until period t₆, then it is likely to be destabilizing because it will introduce a lag between the implementation of the policy and its effect on the economy. This lag may cause unintended consequences, such as overshooting or undershooting the desired economic outcome. Therefore, it is important for policy makers to consider the time lags involved in implementing policies and their impact on the economy when making policy choices.

Refer to the Information Provided in Figure 15