Which of the following pairs of lags are typically shorter for monetary policy than for fiscal policy?
A) the recognition lag and the implementation lag
B) the effectiveness lag and the decision-making lag
C) the decision-making lag and the implementation lag
D) the implementation lag and the effectiveness lag

Question

Which of the following pairs of lags are typically shorter for monetary policy than for fiscal policy?  
A) the recognition lag and the implementation lag 
B) the effectiveness lag and the decision-making lag 
C) the decision-making lag and the implementation lag 
D) the implementation lag and the effectiveness lag

Quizplus · Accepted Answer

Monetary policy typically has shorter decision-making and implementation lags because central banks can adjust interest rates or other monetary tools more quickly than governments can pass and implement fiscal measures.

Which of the Following Pairs of Lags Are Typically Shorter