The fact that it takes time before the private sector responds to the changes in policy is known as:
A) an inside lag.
B) an outside lag.
C) a recognition lag.
D) a decision lag.

Question

Quizplus · Accepted Answer

An outside lag refers to the delay between the implementation of a policy and the observable effects on the economy, as it takes time for the private sector to respond to policy changes.

The Fact That It Takes Time Before the Private Sector