Question 1
Refer to the information provided in Figure 29.1 below to answer the question(s) that follow.


Refer to Figure 29.1. If the condition of the economy at point
E is realized by policy makers when the economy is at point
G, policy is likely to be inappropriate due to
◦ crowding out.
◦ the recognition lag.
◦ the implementation lag.
◦ the response lag.
Question 2
Refer to the information provided in Figure 29.1 below to answer the question(s) that follow.


Refer to Figure 29.1. If the economy is actually at Point
G but policy makers think that it is still at Point
E, this is an example of
◦ economic policies ineffectiveness.
◦ response lag.
◦ implementation lag.
◦ recognition lag.