In general, fiscal policy has a ________ implementation lag than monetary policy and a ________ response lag.
A) shorter; shorter
B) longer; longer
C) longer; shorter
D) shorter; longer

Question

Quizplus · Accepted Answer

Fiscal policy has a longer implementation lag than monetary policy because it involves passing legislation and implementing programs, which can take time. However, fiscal policy can have a shorter response lag than monetary policy because once the programs are in place, they can directly impact the economy faster than changes in interest rates, for example.

In General, Fiscal Policy Has a ________ Implementation Lag Than