The Time It Takes for Policy Makers to Change Policy

question 39

Multiple Choice

The time it takes for policy makers to change policy instruments once they have decided on the new policy is called

• A)the data lag.
• B)the recognition lag.
• C)the legislative lag.
• D)the implementation lag.
• E)the effectiveness lag.

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Definitions:

Binding Price Ceiling

A government-imposed price control set below the market equilibrium price, leading to shortages as the quantity demanded exceeds the quantity supplied at that price level.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price point.

Quantity Supplied

The amount of a commodity that producers are willing and able to offer for sale at a specific price over a defined period of time.

Binding Price Ceiling

A legal maximum price for a good or service that is set below the equilibrium price, resulting in shortages.