Question

Time lags associated with policy decision making and implementation suggest that______.a.increases in spending to fight a recessionary gap may occur too early.b.increases in spending to fight a recessionary gap may occur too late.c.increases in spending to fight a recessionary gap can be timed correctly.d.most information is old before the public is aware of it.

Answer 1

Answer:

B) increases in spending to fight a recessionary gap may occur too late.

Explanation:

Time lags refers to the time that passes between making a decision and implementing the decision. For example, the FED announces its intention to increase or decrease their interest rate with a lot of anticipation, and sometimes it would be better if they just did it.

Politicians are famous for talking a lot and doing very little, and that happens in every country in the world. During recessions words aren't needed, actions are needed. The problem is that many times words are abundant and actions are scarce. A small problem that is not dealt swiftly and properly can become a huge problem.