Policy lags are typically much shorter for monetary policy than for fiscal policy.

Question

Quizplus · Accepted Answer

Monetary policy involves adjusting interest rates and the money supply, which can be implemented relatively quickly by central banks. In contrast, fiscal policy, which involves changes to government spending and taxation, often requires legislative approval and can take longer to implement. Therefore, policy lags are typically shorter for monetary policy.

Policy Lags Are Typically Much Shorter for Monetary Policy Than