Recognition Lags in Fiscal Policy Stem Largely from

question 75

Multiple Choice

Recognition lags in fiscal policy stem largely from

• A) the fact that it takes time before a fiscal policy, such as a change in government purchases or a change in taxes, is agreed to and put into effect.
• B) the fact that it takes time for a policy action to have its full effect on aggregate demand.
• C) the difficulty of collecting economic data in a timely and accurate fashion.
• D) households and businesses may not respond to fiscal policy to the extent that policy makers had hoped, for example, they may not be as responsive to a tax cut .

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Definitions:

Primary Groups

Groups composed of the people who are most important to our sense of self; members’ relationships are typically characterized by face-to-face interaction, high levels of cooperation, and intense feelings of belonging.

Secondary Groups

Groups that are larger and less intimate than primary groups; members’ relationships are usually organized around a specific goal and are often temporary.

Distinct

Clearly noticeable or markedly different from something else.

Group Size

The number of individuals making up a group, which can influence the group's dynamics, communication, and effectiveness.