The total lag for fiscal policy tends to be shorter than the total lag for monetary policy.

Question

Quizplus · Accepted Answer

The total lag for fiscal policy tends to be longer than the total lag for monetary policy. This is because fiscal policy involves the legislative process and implementation of government spending, which takes longer to pass and put into effect compared to the actions of the central bank in implementing monetary policy.

The Total Lag for Fiscal Policy Tends to Be Shorter