Explenation:

Three Lag Times for Fiscal Policy and Monetary Policy

Recognition Lag - the lag time between a change on the business cycle and the time it takes for analysts to see the change in the data.

Implementation Lag - the lag time between seeing a change on the business cycle and the time it takes for fiscal policymakers and/or monetary policymakers to determine a resolution and to implement the resolution. In the US, fiscal policy has a greater implementation lag time than monetary policy does.

Response Lag - the lag time between the policy implementation and the response by consumers and firms to change behavior.

QUESTION..............Why are lag times significant?