Fiscal policy - Criticisms and complications
Complete the following table by indicating whether each scenario is an example of a recognition lag, implementation lag, or impact lag.
Scenario
Recognition Lag
Implementation Lag
Impact Lag
The economy enters a deep recession, and Congress takes two months to approve an extensive tax-cut bill.
Policymakers obtain relevant economic data months after a recession has already begun.
In response to a recession, Congress passes a spending bill for interstate highway upgrades that will take years to plan and complete.
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