ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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There are lags to fiscal policy implementation because:
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it takes time to pass spending or tax legislation
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the economy will stand still until Congress acts
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government spending should decrease during a recession
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the spending multiplier is greater than the tax multiplier
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none of the answers
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Explanation:
Detailed explanation-1: -What Is Implementation Lag? Implementation lag is the delay between an adverse macroeconomic event and the implementation of a fiscal or monetary policy response by the government and central bank.
Detailed explanation-2: -The problem of time lags There are three types of lag in economic policy: the recognition lag, the decision lag, and the effect lag.
Detailed explanation-3: -The effect time lag of fiscal policy refers to. The time between the onset of a policy and when the policy has impact on the economy.
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