The inside lag is relatively shorter for _____ policy and the outside lag is relatively shorter for _____ policy.

Question

Quizplus · Accepted Answer

The inside lag is the time it takes for a policy to affect the economy, and the outside lag is the time it takes for the economy to return to its original state after the policy is removed. Monetary policy has a shorter inside lag because it can be implemented quickly, while fiscal policy has a shorter outside lag because it can be removed quickly.

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