The time gap between a nation's decision to implement a corrective economic policy and the actual results of the policy is known as the:
A) inside lag.
B) inside lapse.
C) outside lag.
D) outside lapse.

Question

Quizplus · Accepted Answer

The time gap between a nation's decision to implement a corrective economic policy and the actual results of the policy is known as the outside lag. This is because there is usually a delay between when the policy is enacted and when it has an effect on the economy, such as changes in interest rates or government spending. The inside lag refers to the delay between when an economic problem arises and when the government decides to take action to address it. The terms "inside lapse" and "outside lapse" are not commonly used in economics.

The Time Gap Between a Nation's Decision to Implement a Corrective