Question

Identify the type of time lag illustrated in the following scenario:

Policymakers have recognized that a recession actually started in June, but the statistics required to fully diagnose the recession aren't available until November.

a. Recognition lag
b. Decision-making lag
c. Implementation lag
d. Effectiveness lag

Answer 1

The correct answer is letter "A": Recognition lag.

Step-by-step explanation:

There are four (4) policy lags: recognition lag, decision-making lag, implementation lag, and impact lag. Recognition lag is the delay between the time an economical event is said to take place and the time it takes to gather data that supports that event is really happening. The process usually takes months and only the belief is confirmed actions are taken.