Which of the following is the order of fastest to slowest acting policy, once enacted, in affecting aggregate demand?

Question

Quizplus · Accepted Answer

Government spending has the most immediate effect on aggregate demand as it directly injects money into the economy. Taxes have a slower effect as it takes time for the impact on consumer spending to be felt. Money has the slowest effect as it operates through interest rate changes which may take time to fully impact aggregate demand. Therefore, the order from fastest to slowest acting policy is government spending, taxes, and money.

Which of the Following Is the Order of Fastest to Slowest