Question

You learned that long and time lags is problematic because it can take time to enact fiscal policy. Match the two sides correctly: - the time it takes to determine that a recession has occurred - the time it takes to get a fiscal policy bill passed - the time it takes for the funds relating to fiscal policy to be dispensed to the appropriate agencies to implement the programs

Answer 1

The time it takes to determine a recession aligns with the time required to dispense funds for fiscal policy. Getting a fiscal policy bill passed corresponds to the time taken to recognize a recession, while the dispersion of funds links with the process of passing fiscal policy bills.

Here's the match for each time lag:

- The time it takes to determine that a recession has occurred matches with the time it takes for the funds relating to fiscal policy to be dispensed to the appropriate agencies to implement the programs.

- The time it takes to get a fiscal policy bill passed matches with the time it takes to determine that a recession has occurred.

- The time it takes for the funds relating to fiscal policy to be dispensed to the appropriate agencies to implement the programs matches with the time it takes to get a fiscal policy bill passed.

These time lags illustrate the delays and challenges associated with enacting and implementing fiscal policy during economic downturns.

Answer 2

The match are:

1. Recognition lag: The time it takes to determine that a recession has occurred.
2. Legislative lag: The time it takes to get a fiscal policy bill passed.
3. Implementation lag: The time it takes for the funds relating to fiscal policy to be dispensed to the appropriate agencies to implement the programs.

Note that:

Recognition lag: This is the time it takes for policymakers to recognize that a recession has occurred. This can be a difficult task, as economic data is often released with a lag and there can be significant uncertainty about the true state of the economy.

Implementation lag: Once policymakers have determined that a recession is underway, they must then design and pass a fiscal policy bill. This can be a lengthy process, as there is often significant debate about the best way to stimulate the economy.