<u>The implementation lag for the fiscal policy is generally longer than it is for monetary policy.
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Further Explanation:
Monetary policy refers to the policies that are implemented by the central bank to influence the supply of money and credit creation in an economy while fiscal policy includes the government’s decisions regarding public expenditure and taxation. The fiscal and monetary policies are both used by the government and the central bank to regulate the economy. They are used to accelerate economic growth when economic growth is slowing or becoming stagnant. The fiscal policy can also be used for the redistribution of wealth and income.
Central banks have the power to implement the monetary policy without any interference from the government. They are independent to implement the monetary system. Therefore, the implementation of the fiscal policy takes longer time than monetary policy.
<u>Thus, the implementation lag for the fiscal policy is generally longer than it is for monetary policy.
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Answer details:
Grade: High School
Subject: Business Studies
Chapter: Stock market
Keywords: Monetary policy, fiscal policy, implementation lag, economy growth, generally longer than Central banks, for fiscal policy, than it is for monetary policy, implementation, longer than, monetary policy.