The effect time lag of fiscal policy refers to
A) the time needed for Congress to enact a policy.
B) the delay in recognizing an economic problem.
C) the time between the onset of a policy and when the policy has impact on the economy.
D) the difficulty in getting the President and the Congress to agree on an appropriate policy.

Question

Quizplus · Accepted Answer

The effect time lag of fiscal policy refers to the time between the implementation of a policy and when it actually has an impact on the economy. This delay can occur because it takes time for the policy to be enacted, for the funds to be distributed, and for individuals and businesses to adjust their behavior in response to the policy. Option A refers to the administrative time lag, Option B refers to the recognition time lag, and Option D refers to the political time lag.

The Effect Time Lag of Fiscal Policy Refers to