A recession begins, but Congress and the President take eighteen months to decide the details of the tax cut that will be used to stimulate the economy. This is an example of
A)an implementation lag.
B)an impact lag.
C)a recognition lag.
D)a legislative lag.

Question

Quizplus · Accepted Answer

This is a legislative lag, as Congress and the President are taking too long to legislate and pass the tax cut. An implementation lag would refer to the time it takes for policies to be put into effect after they have been legislated, while an impact lag refers to the time it takes for policies to have their desired effect on the economy. A recognition lag refers to the time it takes for policymakers to recognize the need for a particular policy in response to economic conditions.

A Recession Begins, but Congress and the President Take Eighteen