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Author Question: What are lawmaking lags? What effect do they have on the use of discretionary fiscal policy? What ... (Read 57 times)

kellyjaisingh

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on: Jun 29, 2018
What are lawmaking lags? What effect do they have on the use of discretionary fiscal policy?
 
  What will be an ideal response?

Question 2

Other things constant, if a person prefers to have a good sooner rather than later
 
  A) she is acting like a child.
  B) she has a negative rate of time preference.
  C) she has a zero rate of time preference.
  D) she has a positive rate of time preference.


vish98

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Lawmaking lags refer to the fact that before discretionary policy can be implemented, Congress must pass an act. There can be significant time involved for Congress to debate and reach consensus on a specific piece of legislation. The time it takes is called the lawmaking lag. Lawmaking lags make discretionary fiscal policy more difficult because by the time the policy is actually implemented, the state of the economy might have changed and so the newly enacted discretionary fiscal policy might now be the wrong policy.

Answer to Question 2

D


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