Suppose that Congress enacts a Question content area Part 1 Which of the following defines a recognition time lag? A. The time that elapses between the implementation of a policy and the results of a policy. B. The time required for prices to become fully flexible. C. The time required to gather information about the current state of the economy. D. The time between recognizing a problem and implementing policy to solve it.tax cut with the expectation that this action will stimulate aggregate demand and push up real GDP in the short run. In fact, however, neither real GDP nor the price level changes significantly as a result of the tax cut. This outcome can be explained by all of the following, except one. Which one of the following is the exception? Part 2 A. Indirect crowding out. B. The Fed's contractionary monetary policy. C. Automatic stabilizers. D. The Ricardian Equivalence Theorem