The Implementation Lag of Stabilization Policy Represents

question 196

Multiple Choice

The implementation lag of stabilization policy represents

• A) the time that is necessary to put the desired policy into effect once economists and policy makers recognize the need.
• B) the time needed for the economy to adjust to new conditions after new policies are introduced.
• C) the time needed for the Federal Reserve to meet.
• D) the time that is needed for policy makers to recognize the need to do something.

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Definitions:

Unemployed Resources

Factors of production that are not currently being used to their full potential.

Production Possibilities Frontier

A curve depicting the maximum feasible amounts of two different goods that can be produced with available resources and technology.

Aggregate Supply Curve

A graphical representation showing the total supply of goods and services that firms in an economy are willing and able to produce at different price levels.

Maximum Output Level

The highest quantity of goods or services an economy or enterprise can produce using its current resources and technology.