Answered: The lag between the time the need for…

The lag between the time the need for fiscal action is recognized and the time action is taken is referred to as the crowding-out lag recognition lag operational lag administrative lag

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter11: Fiscal Policy And The Federal Budget

Section: Chapter Questions

Problem 14QP

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Concept explainers

Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.

Question

The lag between the time the need for fiscal action is recognized and the time action is taken is referred to as the

crowding-out lag

recognition lag

operational lag

administrative lag

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