Identify the lag.

Question

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Answer 1

Question

Chapter 16, Problem 1QQ

To determine

Identify the lag.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock. In the case of economic stabilization, a long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect.

Hence, the inside lag is the time between when a shock hits the economy and when a policy responds to it. It is particularly long for fiscal policy.

Thus, option (b) is correct.

Option (a):

In the case of economic stabilization, the inside lag represents the time between a shock to the economy and a policy action responding to that shock. A long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect. At the same time, monetary policy has a shorter inside lag than fiscal policy because a central bank can decide on and implement a policy change in less than a day.

Thus, option (a) is incorrect.

Option (c):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock, and the outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (c) is incorrect.

Option (d):

The outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (d) is incorrect.

Economics Concept Introduction

Lags: The presence of lags is the one of the practical difficulties associated with economic stabilization that indicates the time to recognize and take actions to respond to shocks that hit the economy.

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Answer 2

Question

Chapter 16, Problem 1QQ

To determine

Identify the lag.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock. In the case of economic stabilization, a long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect.

Hence, the inside lag is the time between when a shock hits the economy and when a policy responds to it. It is particularly long for fiscal policy.

Thus, option (b) is correct.

Option (a):

In the case of economic stabilization, the inside lag represents the time between a shock to the economy and a policy action responding to that shock. A long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect. At the same time, monetary policy has a shorter inside lag than fiscal policy because a central bank can decide on and implement a policy change in less than a day.

Thus, option (a) is incorrect.

Option (c):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock, and the outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (c) is incorrect.

Option (d):

The outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (d) is incorrect.

Economics Concept Introduction

Lags: The presence of lags is the one of the practical difficulties associated with economic stabilization that indicates the time to recognize and take actions to respond to shocks that hit the economy.

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Answer 3

Question

Chapter 16, Problem 1QQ

To determine

Identify the lag.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock. In the case of economic stabilization, a long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect.

Hence, the inside lag is the time between when a shock hits the economy and when a policy responds to it. It is particularly long for fiscal policy.

Thus, option (b) is correct.

Option (a):

In the case of economic stabilization, the inside lag represents the time between a shock to the economy and a policy action responding to that shock. A long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect. At the same time, monetary policy has a shorter inside lag than fiscal policy because a central bank can decide on and implement a policy change in less than a day.

Thus, option (a) is incorrect.

Option (c):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock, and the outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (c) is incorrect.

Option (d):

The outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (d) is incorrect.

Economics Concept Introduction

Lags: The presence of lags is the one of the practical difficulties associated with economic stabilization that indicates the time to recognize and take actions to respond to shocks that hit the economy.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 1QQ

To determine

Identify the lag.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock. In the case of economic stabilization, a long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect.

Hence, the inside lag is the time between when a shock hits the economy and when a policy responds to it. It is particularly long for fiscal policy.

Thus, option (b) is correct.

Option (a):

In the case of economic stabilization, the inside lag represents the time between a shock to the economy and a policy action responding to that shock. A long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect. At the same time, monetary policy has a shorter inside lag than fiscal policy because a central bank can decide on and implement a policy change in less than a day.

Thus, option (a) is incorrect.

Option (c):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock, and the outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (c) is incorrect.

Option (d):

The outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (d) is incorrect.

Economics Concept Introduction

Lags: The presence of lags is the one of the practical difficulties associated with economic stabilization that indicates the time to recognize and take actions to respond to shocks that hit the economy.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1QQ

To determine

Identify the lag.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock. In the case of economic stabilization, a long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect.

Hence, the inside lag is the time between when a shock hits the economy and when a policy responds to it. It is particularly long for fiscal policy.

Thus, option (b) is correct.

Option (a):

In the case of economic stabilization, the inside lag represents the time between a shock to the economy and a policy action responding to that shock. A long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect. At the same time, monetary policy has a shorter inside lag than fiscal policy because a central bank can decide on and implement a policy change in less than a day.

Thus, option (a) is incorrect.

Option (c):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock, and the outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (c) is incorrect.

Option (d):

The outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (d) is incorrect.

Economics Concept Introduction

Lags: The presence of lags is the one of the practical difficulties associated with economic stabilization that indicates the time to recognize and take actions to respond to shocks that hit the economy.

Answer 6

Chapter 16, Problem 1QQ

To determine

Identify the lag.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock. In the case of economic stabilization, a long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect.

Hence, the inside lag is the time between when a shock hits the economy and when a policy responds to it. It is particularly long for fiscal policy.

Thus, option (b) is correct.

Option (a):

In the case of economic stabilization, the inside lag represents the time between a shock to the economy and a policy action responding to that shock. A long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect. At the same time, monetary policy has a shorter inside lag than fiscal policy because a central bank can decide on and implement a policy change in less than a day.

Thus, option (a) is incorrect.

Option (c):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock, and the outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (c) is incorrect.

Option (d):

The outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (d) is incorrect.

Economics Concept Introduction

Lags: The presence of lags is the one of the practical difficulties associated with economic stabilization that indicates the time to recognize and take actions to respond to shocks that hit the economy.

Answer 7

Chapter 16, Problem 1QQ

To determine

Identify the lag.

Answer 8

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Option (b):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock. In the case of economic stabilization, a long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect.

Hence, the inside lag is the time between when a shock hits the economy and when a policy responds to it. It is particularly long for fiscal policy.

Thus, option (b) is correct.

Option (a):

In the case of economic stabilization, the inside lag represents the time between a shock to the economy and a policy action responding to that shock. A long inside lag associated with the fiscal policy is the central problem of economic stabilization because it takes time for policymakers to recognize that a shock has occurred and to put appropriate policies into effect. At the same time, monetary policy has a shorter inside lag than fiscal policy because a central bank can decide on and implement a policy change in less than a day.

Thus, option (a) is incorrect.

Option (c):

The lags are classified into two types, the inside lag and the outside lag, for a better implementation of the stabilization policy in an economy. The inside lag represents the time between a shock to the economy and a policy action responding to that shock, and the outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (c) is incorrect.

Option (d):

The outside lag represents the time between a policy action and its influence on the economy. This lag arises because policies do not immediately influence spending, income, and employment.

Thus, option (d) is incorrect.

Answer 12

Economics Concept Introduction

Lags: The presence of lags is the one of the practical difficulties associated with economic stabilization that indicates the time to recognize and take actions to respond to shocks that hit the economy.

Answer 13

Ch. 16 - Prob. 1QQ Ch. 16 - Prob. 2QQ Ch. 16 - Prob. 3QQ Ch. 16 - Prob. 4QQ Ch. 16 - Prob. 5QQ Ch. 16 - Prob. 6QQ Ch. 16 - Prob. 1QR Ch. 16 - Prob. 2QR Ch. 16 - Prob. 3QR Ch. 16 - Prob. 4QR

Identify the lag.

Concept explainers

Identify the lag.

Answer to Problem 1QQ

Explanation of Solution

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Chapter 16 Solutions