Answer to Question #54513 in Microeconomics for Tan Ser Ying

Question

Time lags, Explain:
(1) Information lags
(2) Policy Determination lags
(3) Policy effectiveness lags

Answer 1

(1) Information lags - when some factors and information may be misunderstood, which will cause the incorrect use of it.
(2) Policy Determination lags is the incorrect determination of the economic event, which will cause the use of inappropriate policy.
(3) Policy effectiveness lags may be caused, when the implemented policy is less effective, than expected.