Which of the following best describes the difference between monetary policy and fiscal policy? Monetary policy...

Which of the following best describes the difference between monetary policy and fiscal policy?

		Monetary policy is quicker to implement but has a longer effect lag than fiscal policy.
		Monetary policy is slower to implement but has a longer effect lag than fiscal policy.
		Monetary policy is quicker to implement but has a shorter effect lag than fiscal policy.
		Monetary policy is slower to implement but has a shorter effect lag than fiscal policy.

Solutions

Expert Solution

Ans. Monetary policy is quicker to implement but has a longerelonger lag than fiscal policy.

Fiscal policy even though has larger inside lag as compared to monetary policy, it has a shorter outside lag as compared to monetary policy.

Rahul Sunny answered 1 year ago

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