Suppose the economy is experiencing a significant recessionary gap,but it has taken the government six months to determine that it will change fiscal policy.This is an example of
A)an execution lag.
B)fine tuning.
C)gross tuning.
D)a decision lag.
E)automatic fiscal stabilizers.

Question

Quizplus · Accepted Answer

This scenario is an example of a decision lag, which refers to the delay between when an economic problem is identified and when the government takes action to address it. In this case, the government took six months to determine a change in fiscal policy, indicating a decision lag. The other options don't accurately describe this situation. Fine tuning refers to small adjustments made to the economy, while gross tuning refers to large-scale changes. Execution lag refers to the time it takes for a policy to take effect, while automatic fiscal stabilizers refer to government programs that automatically stabilize the economy without the need for intervention.

Suppose the Economy Is Experiencing a Significant Recessionary Gap,but It