One reason that long time lags hamper the effectiveness of economic policy is th

Question

One reason that long time lags hamper the effectiveness of economic policy is that
A) people don't want to wait for economic recovery
B) the longer unemployment lasts the more intense inflation becomes
C) by the time the impact of a policy is felt, a new problem may have come along that requires a different policy, which may make the economic situation even worse
D) if inflation is allowed to continue for too long, it becomes immune to policy interference
E) if unemployment is allowed to continue for too long, it becomes immune to policy interference
6.
The time it takes for the Fed's purchase of government securities to ultimately change aggregate demand is called the
A) recognition lag
B) implementation lag
C) effectiveness lag
D) decision-making lag
E) self-correction lag

Explanation / Answer

C) by the time the impact of a policy is felt, a new problem may have come along that requires a different policy, which may make the economic situation even worse C) effectiveness lag

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