The inside lag is relatively shorter for _____ policy; the outside lag is relatively shorter for _____ policy.
A)monetary; fiscal
B)monetary; monetary
C)fiscal; monetary
D)fiscal; fiscal

Question

Quizplus · Accepted Answer

Monetary policy has a shorter inside lag because it can be implemented more quickly than fiscal policy. Fiscal policy has a shorter outside lag because it takes longer for the effects of fiscal policy to be felt in the economy.

The Inside Lag Is Relatively Shorter for _____ Policy; the Outside