DECISION LAG: The time lag that it takes government leaders and policy makers to determine the appropriate government action needed to address an economic problem. The decision lag arises because it takes time for policy makers to chose among the array of possible policy actions, each with assorted consequences that appeal differently to different political constituencies. This "inside lag" is one of four policy lags associated with monetary and fiscal policy. The other two "inside lags" are recognition lag and implementation lag, and one "outside lag" is implementation lag. All four policy lags can reduce the effectiveness of business-cycle stabilization policies and can even destabilize the economy.

     See also | policy lags | recognition lag | implementation lag | impact lag | automatic stabilizers | stabilization policies | unemployment | contraction | inflation | expansion | Federal Open Market Committee | Federal Reserve System | government purchases | transfer payments | taxes | open market operations | discount rate | reserve requirements | fiscal policy | monetary policy | recessionary gap | inflationary gap | recessionary gap, Keynesian model | inflationary gap, Keynesian model | multiplier | accelerator principle | paradox of thrift | injections-leakages model |

DECISION LAG, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2026. [Accessed: September 6, 2026].

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The family of short-run cost curves consisting of average total cost, average variable cost, and marginal cost, all of which have U-shapes. Each is U-shaped because it begins with relatively high but falling cost for small quantities of output, reaches a minimum value, then has rising cost at large quantities of output. Although the average fixed cost curve is not U-shaped, it is occasionally included with the other three just for sake of completeness.

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