Which of the following are lags that fiscal policy makers must cope with?
A) Recognition time lags.
B) Action time lags.
C) Effect time lags.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

Fiscal policy makers must cope with all three types of lags - recognition time lags, action time lags, and effect time lags. Recognition time lags refer to the time it takes for policymakers to identify a problem in the economy, action time lags refer to the time it takes to implement policies once identified, and effect time lags refer to the time it takes for the policies to have their intended effect on the economy.

Which of the Following Are Lags That Fiscal Policy Makers