Even when the Obama administration succeeds with its effort to gain Congressional approval for its stimulus proposals, it will still take time for these policies to actually work. The time it takes for these policies to work is known as
A) inside lags.
B) outside lags.
C) automatic stabilization.
D) crowding out.

Question

Quizplus · Accepted Answer

Outside lags refer to the time it takes for government fiscal policies, such as stimulus spending, to take effect on the economy. This can be due to the time it takes to implement these policies or for consumers and businesses to react to them. Therefore, even if the Obama administration succeeds in gaining Congressional approval for its stimulus proposals, the policies will still take time to actually work due to outside lags.

Even When the Obama Administration Succeeds with Its Effort to Gain