In the context of fiscal policy, lag problems typically refer to delays in the time it takes for various economic data to be recognized, analyzed, and acted upon through government policy. The common types of lags associated with fiscal policy are:
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Recognition Lag - The time it takes for the government to recognize that there is an economic issue that needs to be addressed.
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Administrative Lag - The delay in the time it takes for lawmakers to draft and approve legislation in response to the recognized economic issue.
The other options, such as "Operational," "Consumption," and "Investment," are not typically categorized as lag problems faced by the government related to fiscal policy. Instead, they are related to economic outcomes or factors in the economy.
So, the correct selections related to lag problems in fiscal policy are:
- Recognition
- Administrative