Multiple Choice
the delay between the time fiscal action is ordered and the time that it actually begins to affect output, employment, or the price level.
the time between when policymakers recognize the need for a fiscal action and when that fiscal action is actually taken.
the time between the beginning of recession or inflation and the certain awareness that it is actually happening.
the time between when businesses apply for a tax id and when they actually receive it.
1 answer
The correct answer is:
the time between when policymakers recognize the need for a fiscal action and when that fiscal action is actually taken.
This definition captures the concept of operational lag in the context of fiscal policy, which refers to the delays in the implementation of fiscal actions after recognizing the need for them.
