There Is No Guarantee That After a Tax Cut Households

Multiple Choice

There is no guarantee that after a tax cut households will immediately use their extra disposable income to consume more goods and services; they may maintain old spending patterns and change their spending slowly over time.As a result,the ________ for fiscal policy can last from several months to several years.

A) the response and recognition lags
B) the recognition lag
C) the impact lag
D) all three policy lags