The Time It Takes for a New Policy to Register

question 11

Multiple Choice

The time it takes for a new policy to register its full impact on the economy after it has been put in force is known as the_____.

• A)activity lag
• B)decision-making lag
• C)effectiveness lag
• D)implementation lag
• E)recognition lag

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Definitions:

Depreciation Expense

An accounting method used to allocate the cost of a tangible asset over its useful life.

Machine Hours

A measure of the operating time of a machine, used in costing and budgeting to allocate expenses based on usage.

Units-Of-Production

A depreciation method that allocates the cost of an asset over its useful life based on the number of units it produces.

Depreciable Cost

The initial cost of an asset minus its salvage value, which is the amount that can be depreciated over the life of the asset.