Question

The lag problem associated with fiscal policy is due mostly to Group of answer choices the time it takes for changes in government spending or taxes to affect the interest rate. the fact that business firms make investment plans far in advance. the political system of passing legislation that slows down the process of implementing fiscal policy. All of the above are correct.

Answer 1

Answer:

the fact that business firms make investment plans far in advance.

Explanation:

Usually businesses make investment plans years in advance. Imagine if a business plans to open a new factory, just the actual building of the facility may take over a year, plus the time it needs to set up machinery and start production. All that plus the time the company needed to analyze the project plus the time needed to get the money necessary to start the investment.