Question

The ___________ lag for fiscal policy is generally ______ than it is for monetary policy.

Answer 1

The Board of Governors of the Federal Reserve will intervene when its member banks run low on currency and coin. The Federal Reserve or the Fed is the American central bank. It was created in 1913 and its purpose is to implement the US government's monetary policy. The Fed is independent of the US Congress, but Congress is allowed to review the Fed's activities. The Board of Governers consists of seven members who are each appointed by the President of the United States

Answer 2

The implementation lag for the fiscal policy is generally longer than it is for monetary policy.

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.

Thus, the implementation lag for the fiscal policy is generally longer than it is for monetary policy.

Learn more:

1.      Learn more about the total cost

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2.      Learn more about the variable cost

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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.