Question

Which of the following contributes to the lag in implementing fiscal policy?

It takes time for Congress and the president to pass spending and tax changes.
Current economic data takes time to collect and analyze.
It takes time for policy makers to realize an output gap exists.
It takes time for changes in spending and tax policy to take effect.
All of the above contribute

Answer 1

The correct answer is: All of the above contribute.

Step-by-step explanation:

Fiscal policy is a branch of economic policy that configures the state budget, and its components, public spending and taxes, as control variables to ensure and maintain economic stability, damping variations in economic cycles, and contributing to maintain a growing economy, full employment and low inflation. The birth of Keynesian macroeconomic theory showed that fiscal policy measures greatly influence short-term variations in production, employment and prices.