Question

Why is the inside lag for monetary policy shorter than for fiscal policy?
@whpalmer4

Answer 1

@happytales

Answer 2

@Opcode

Answer 3

Macroeconomics? Bigggg no no... lol sorry

Answer 4

Well I know that from my textbook the outside lag is the time it takes after a policy is selected and implemented by appropriate government entities, before it works its magic on the economy and Inside lag is the time it takes between the actual onset of a problem and the launching of the corrective action by government.

Answer 5

The choices are
A. Congress and the President can act quickly to change monetary policy
B. The Federal Open Market Committee must get Congressional approval
C. It can take a long time for new government spending to take effect
D. The Federal Open Market Committee can act almost immediately

Answer 6

So I would say the answer is D because policy decisions are implemented by a special branch of the Federal Reserve System devoted to this task. Once a policy action is identified then the implementation steps are begun almost immediately and because monetary policy works through financial markets which tend to operate quickly implementation is completed in a short order.

Answer 7

Does this make sense to anyone ? I just need to make sure that I am choosing the correct answer.

Answer 8

@Opcode @whpalmer4 @linda3 @ganeshie8 @thomaster @HelpBlahBlahBlah @hartnn @happytales

Answer 9

Well, the Fed Open Market Committee certainly can act quickly, if it chooses to do so.

Answer 10

I agree with D, because I know from experience that A and C are wrong and B doesn't really make as much sense.