One timing problem in using ﬁscal policy to counter a recession is the "administrative lag" that occurs between the
A) start of the recession and the time it takes to recognize that the recession has started.
B) start of a predicted recession and the actual start of the recession.
C) time ﬁscal action is taken and the time that the action has its effect on the economy.
D) time the need for the ﬁscal action is recognized and the time that the action is taken.

Question

Quizplus · Accepted Answer

Administrative lag refers to the delay between recognizing the need for fiscal action and the actual implementation of these measures. This can slow down the effectiveness of fiscal policy in countering a recession.

One Timing Problem in Using ﬁScal Policy to Counter a Recession