The outside lag is the time:
A) before automatic stabilizers respond to economic activity.
B) when automatic stabilizers are not effective.
C) between a shock to the economy and the policy action responding to the shock.
D) between a policy action and its influence on the economy.

Question

Quizplus · Accepted Answer

The outside lag refers to the delay between the implementation of a policy action (such as a change in fiscal or monetary policy) and the time when that action has its intended effect on the economy.

The Outside Lag Is the Time