There Is No Guarantee That After a Tax Cut Households

question 67

Multiple Choice

There is no guarantee that after a tax cut households will immediately use their extra disposable income to consume more goods and services; they may maintain old spending patterns and change their spending slowly over time.As a result,the ________ for fiscal policy can last from several months to several years.

• A) the response and recognition lags
• B) the recognition lag
• C) the impact lag
• D) all three policy lags

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Definitions:

Stress

A psychological and physical response of the body to demands or challenges that disturb the individual's balance or perceived ability to cope.

Life's Troubles

Difficulties or challenges that one encounters in daily living, which can vary in nature and severity.

Frustration

A psychological state resulting from blocked goals or unmet needs, often leading to stress or negative emotions.

Stress

A physical, mental, or emotional factor that causes bodily or mental tension.