What are the three time lags associated with fiscal policy

Expert Solution

The three time lags associated with fiscal policy are:

(1) Recognition lag: This refers to the time taken to identify or recognize a particular problem

(2) Decision lag: This refers to the time taken between recognizing a problem and identifying the correct fiscal policy action to be taken to resolve the problem.

(3) Implementation lag: This refers to the time taken between an appropriate policy response is selected and it is implemented.

Rahul Sunny answered 2 years ago

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