Question

The operational lag of fiscal policy refers to the time that elapses between the beginning of a recession or inflation and the certain awareness that it is actually happening.
True / False.

Answer 1

Answer:

FALSE

Explanation:

The operational lag of fiscal policy is the time gap between the adoption of a corrective measure and the perception of its effects on the economy. For example, in a recessionary context, analysts and the Fed have no difficulty predicting the economic problem, as there are statistical software and predictive models that can predict recessive economic scenarios. However, through economic policies, the government takes steps to reverse the recessive picture. By their nature, these policies demand a time between their adoption and their effect on the economy, which is operational lag.