Time lags in the design,authorization,and implementation of fiscal policy reduce its effectiveness.
In the time it takes for fiscal policy to take effect,the economy could begin to improve on its own due to other internal or external shocks that may have occurred.

Question

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Time lags can diminish the potency of fiscal policy because by the time it is put into action, the economy may have already experienced some changes that have altered the situation. The benefits of the fiscal stimulus may then be limited.

Time Lags in the Design,authorization,and Implementation of Fiscal Policy Reduce