Question 1

The time required to acquire information about the state of the economy is referred to as

Accepted Answer

The recognition time lag is the time required to acquire information about the state of the economy.

Question 2

The recognition time lag is the time that elapses between

Accepted Answer

The recognition time lag refers to the period of time between when an economic problem becomes apparent and when it is officially acknowledged by policymakers or economic authorities. This delay can occur due to information gaps, bureaucratic processes, or political considerations.

Question 3

The amount of time that it takes between recognizing an economic problem and implementing policy to solve it is

Accepted Answer

The time lag between recognizing an economic problem and implementing policy to solve it is called the action time lag. This is the time it takes for policymakers to develop and implement a solution, which can involve navigating political processes and building consensus among various stakeholders. The other options listed (fiscal policy, recognition time lag, and effect time lag) do not directly address the time it takes to implement policy solutions.

Question 4

The amount of time that it takes to identify a national economic problem is

Accepted Answer

The time it takes to identify a national economic problem is referred to as the recognition time lag, which is the delay between the occurrence of an economic problem and its recognition by decision-makers. Fiscal policy refers to the government's use of taxation and spending to influence the economy, while the effect time lag refers to the delay between the implementation of fiscal policy and its actual effect on the economy. The action time lag refers to the time it takes for policymakers to implement fiscal policy once they have recognized the problem.

Question 5

In January 2009, the President submitted a bill to Congress that was designed to stimulate the economy and increase employment. The legislation was passed in March 2009, and the spending occurred from June 2009 to September 2010. Consequently

Accepted Answer

The full effect of the spending would be felt some time after September 2010 because the multiplier effect of increased spending takes time to fully circulate through the economy. Additionally, it should be noted that even with the spending, full employment could not be achieved in such a short period of time.

Question 6

To the extent that the political process of moving legislation through Congress is slow

Accepted Answer

The action time lag refers to the period of time it takes for a fiscal policy to take effect once it has been implemented. If the political process of moving legislation through Congress is slow, then the action time lag will also be long, as it will take longer for the policy to be implemented and have an effect on the economy.

Question 7

Fiscal policy may end up being destabilizing to an economy because

Accepted Answer

Fiscal policy can be destabilizing because the time lags associated with it may cause the policy changes to take effect too late to solve the problem it was intended to solve. This delay can lead to the policy being ineffective or even counterproductive, potentially worsening the situation. Additionally, it can be difficult for policymakers to predict the exact timing and magnitude of the economic impact of their fiscal policy decisions, making it challenging to implement an effective and timely response to economic conditions.

Question 8

The time that elapses between the implementation of a policy and its intended result is referred to as

Accepted Answer

The effect time lag refers to the time it takes for a policy to produce its intended result. This lag can be influenced by a variety of factors, such as the complexity of the policy, the level of implementation, and the behavior of those affected by the policy. The action time lag refers to the delay between the identification of a problem and the implementation of a policy to address it. The recognition time lag refers to the delay between the emergence of a problem and its recognition by policymakers. The data lag refers to the time it takes for data to be collected and analyzed before a policy decision can be made.

Question 9

The action time lag is the time period that elapses

Accepted Answer

The action time lag is the time period between the recognition of an economic problem and implementing policies to solve it. This lag exists because policymakers need to study and analyze the situation, decide on the appropriate course of action, and then implement the policies. It can take a significant amount of time for this entire process to take place, and during that time, the economic problem can worsen.

Question 10

When it takes time for the president and Congress to change fiscal policy to act on economic data, we have a(n)

Accepted Answer

An action time lag refers to the time it takes for policymakers, such as the president and Congress, to implement changes to fiscal policy based on economic data. This lag can result in delayed responses to economic changes, which can have consequences for the overall economy. The other options - aggregate time lag, recognition time lag, and effect time lag - are related to different aspects of the time it takes for economic policy to have an impact, but do not directly relate to the delay in policymakers taking action.

Question 11

Once either expansionary or contractionary fiscal policy has been undertaken,

Accepted Answer

There is a time lag between the implementation of fiscal policy and the response of the economy. This time lag can be variable depending on the type of policy and the specific economic conditions. Therefore, it may take some time for the effects of the policy to be felt in the economy.

Question 12

The effect time lag is the time period that elapses

Accepted Answer

The effect time lag refers to the delay between implementing policies to solve an economic problem and when the results of that policy can be measured. This delay can be caused by various factors such as the time it takes for the policy to be fully implemented, the time it takes for the economy to adjust to the policy changes, and the time it takes for the data to be collected and analyzed to determine the effectiveness of the policy.

Question 13

The amount of time it takes Congress to debate the size of a tax cut is known as the

Accepted Answer

The action time lag refers to the time it takes for Congress to debate and take action on fiscal policies, such as tax cuts. This includes the time it takes for a proposal to be introduced, discussed, and voted on. The effect time lag refers to the time it takes for the policy changes to have an impact on the economy, and the recognition time lag refers to the time it takes for policymakers to recognize the need for a policy change. The Ricardian-equivalence time lag is not a concept related to the time it takes for Congress to debate tax cuts.

Question 14

The amount of time that elapses between the implementation of a policy and the results of that policy is

Accepted Answer

The effect time lag refers to the delay between the implementation of a policy and when the effects of that policy are actually seen. This delay can occur due to a variety of factors, such as the time it takes for individuals and businesses to change their behavior in response to the policy or the time it takes for information and data to be collected and analyzed. The other options are not accurate descriptions of this time lag.

Question 15

The various time lags involved with fiscal policy imply that

Accepted Answer

Fiscal policy can be destabilizing if there are significant time lags between the implementation of the policy and its effects, causing it to take effect after the economic conditions have changed.

Question 16

In January 2009, the President submitted a bill to Congress in order to stimulate the economy and increase employment. The legislation was passed in March 2009, and the spending occurred from June 2009 to March 2011. As a result

Accepted Answer

The time lag between the passing of the legislation and the actual spending means that the full effect of the fiscal policy change would not be felt until after March 2011. This time lag is known as the implementation time lag.

Question 17

Discretionary fiscal policy

Accepted Answer

Discretionary fiscal policy can take several months to have any effect on the economy due to time lags. Therefore, it may not have immediate or desired effects on real GDP.

Question 18

When data on the economy requires some time to gather and interpret, we have a(n)

Accepted Answer

A recognition time lag refers to the time it takes for policymakers to recognize that changes in the economy have occurred, which can take some time to gather and analyze data. Aggregate time lag refers to the time it takes for changes in policy to affect the entire economy, while an action time lag refers to the time it takes policymakers to take action once they have recognized a problem. The effect time lag refers to the time it takes for changes in policy to have an actual effect on the economy.

Question 19

A problem with using fiscal policy to fine-tune the economy is that

Accepted Answer

Agreeing on the appropriate fiscal policy can be a time-consuming process that may involve political debates, negotiations, and compromise. Therefore, it may not always be feasible to implement fiscal policy in a timely and effective manner to fine-tune the economy. Moreover, fiscal policy tends to have a lagged effect on the economy, meaning that it may take some time for the policy to produce its desired impact.

Question 20

The recognition time lag recognizes that it takes time

Accepted Answer

The answer of The recognition time lag recognizes that it...

Quiz 12: Fiscal Policy