Suppose the government had made a decision to change fiscal policy,but it then took nine months to implement a tax reduction.This is an example of
A)a decision lag.
B)fine tuning.
C)gross tuning.
D)automatic fiscal stabilizers.
E)an execution lag.

Question

Quizplus · Accepted Answer

This is an execution lag because the government has already made a decision but it took a long time to implement the policy. A decision lag would be if the government took a long time to make a decision in the first place. Fine tuning and gross tuning refer to the degree of precision when adjusting fiscal policy. Automatic fiscal stabilizers refer to the automatic changes in government spending and revenue that occur in response to changes in the economy, without any deliberate action by policymakers.

Suppose the Government Had Made a Decision to Change Fiscal