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:

Logically Related Concepts

Ideas or terms that are connected in a rational or coherent manner, allowing for systematic reasoning or inference.

Organize

To arrange or structure things in a systematic way for efficiency or clarity.

Explain

To make (an idea, situation, or problem) clear to someone by describing it in more detail or revealing relevant facts.

Predict Data

The process of using statistical methods, algorithms, or models to forecast future outcomes or trends based on historical or current data.