The implementation lag for fiscal policy tends to be much longer than for monetary policy because fiscal policy requires
A) changes in required reserves.
B) changes in open-market operations.
C) changes in congressional-approved spending and tax programs.
D) changes in exports and imports.

Question

Quizplus · Accepted Answer

Fiscal policy involves changes in government spending and taxation, which requires approval from Congress. This approval process can be lengthy and time-consuming, resulting in a longer implementation lag for fiscal policy compared to monetary policy, which can be implemented quickly through changes in interest rates or reserve requirements.

The Implementation Lag for Fiscal Policy Tends to Be Much