The _____ lag is typically longer for fiscal policy than monetary policy.
A)supply
B)cyclical
C)effectiveness
D)implementation
E)recognition

Question

Quizplus · Accepted Answer

The implementation lag refers to the time it takes for policymakers to put their chosen policy into effect. In the case of fiscal policy, implementing changes in government spending or taxation often requires time-consuming steps such as budget proposals, legislative approval, and administrative implementation. As a result, the implementation lag for fiscal policy is typically longer than for monetary policy, which can be implemented more quickly through actions such as changing interest rates.

The _____ Lag Is Typically Longer for Fiscal Policy Than