All of the following are examples of outside lags associated with fiscal policy, except:

Question

Quizplus · Accepted Answer

The delays in the actual formulation of fiscal policy are an inside lag, as they are delays within the government's decision-making process.

The other choices are examples of outside lags, which refer to the time it takes for the effects of fiscal policy to work through the economy. For example, when personal or corporate taxes are lowered, it takes time for individuals or businesses to adjust their behavior and increase consumption or investment, resulting in delays in the working of the multiplier effect through the economy.

All of the Following Are Examples of Outside Lags Associated