The Lag Problem Associated with Fiscal Policy Is Due Mostly

question 48

Multiple Choice

The lag problem associated with fiscal policy is due mostly to

• A)the fact that business firms make investment plans far in advance.
• B)the political system of checks and balances that slows down the process of implementing fiscal policy.
• C)the time it takes for changes in government spending or taxes to affect the interest rate.
• D)All of the above are correct.

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Definitions:

First Amendment

An amendment to the U.S. Constitution protecting freedoms concerning religion, expression, assembly, and the right to petition.

Service of Process

The procedure by which a party to a lawsuit gives an appropriate notice of initial legal action to another party (such as a defendant), court, or administrative body in an effort to exercise jurisdiction over that person or entity.

Appellate Court

A higher court, usually consisting of more than one judge, that reviews the decision and results of a lower court (either a trial court or a lower-level appellate court) when a losing party files for an appeal. Appellate courts do not hold trials but may request additional oral and written arguments from each party; they issue written decisions, which collectively constitute case law or the common law. Also called court of appellate jurisdiction.

Trial Court

The level of court in which civil and criminal cases are initially tried and judged, as opposed to appellate courts which review decisions made by trial courts.