The time between a policy action and its influence on the economy is called the:
A) automatic stabilizer.
B) time inconsistency of policy.
C) inside lag.
D) outside lag.

Question

Quizplus · Accepted Answer

The time between a policy action and its influence on the economy is known as the outside lag. It takes time for policies to be implemented and for their effects to be felt on the economy, and this delay is referred to as the outside lag.

The Time Between a Policy Action and Its Influence on the Economy