Fiscal policy generally has a _______ direct impact than monetary policy on the economy, and the formulation and implementation of fiscal policy is ______ than that of monetary policy.

Question

Quizplus · Accepted Answer

Fiscal policy involves changes in government spending and taxation, which take time to negotiate and implement. In contrast, monetary policy involves changes in interest rates, which can be implemented more quickly by the central bank. Additionally, fiscal policy has a more direct impact on the economy because it directly affects government spending and taxation, whereas monetary policy indirectly affects spending and investment through changes in interest rates.

Fiscal Policy Generally Has a _______ Direct Impact Than Monetary