Concept explainers
The possibility of time lags to cause discretionary fiscal policy to destabilize real
Concept introduction:
Time Lag- A delay in the implementation of the fiscal or
Fiscal Policy- The government policy related to the public revenue, borrowing and expenditure decisions is the fiscal policy of the country. It is generally founded on pre-determined rules founded in the constitution or other guiding authoritative structures. However, the government from time to time takes ad-hoc policy measures in response to economic turmoil in the country like a slowdown, depression, recovery or boom to affect factors like aggregate demand, savings, investment, income distribution etc. Such policy measures are called the discretionary fiscal policy measures.
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