The Operational Lag Seemingly Did Not Apply in the Case

question 44

Multiple Choice

The operational lag seemingly did not apply in the case of the 2003 tax cut because it took

• A)several months in 2003 for Congress to agree on a tax cut package even after they had agreed on having one.
• B)only a month or two from the passage of the 2003 tax cut to the issuance to rebate checks.
• C)until Fall 2001 to recognize that the recession of 2001 had started January 2001.
• D)until Summer 2003 to recognize that the recession of 2001 ended in December of 2001.

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Definitions:

Federal Income Taxes

Taxes levied by the U.S. federal government on individual and corporate income.

FICA Taxes

Federal taxes in the United States collected to fund Social Security and Medicare, required deductions from employees’ paychecks.

Quarterly Federal Tax Return

A tax document filed four times a year by employers to report their employee's wages and the federal income and FICA taxes withheld.

FUTA Tax Return

A federal tax form required from employers to report and pay unemployment taxes to the Internal Revenue Service, associated with the Federal Unemployment Tax Act.