Question

Fiscal policy lags:_________.

a) are generally longer than monetary policy lags.
b) are generally shorter than monetary policy lags.
c) are generally the same length as monetary policy lags.
d) may be shorter or longer than monetary policy lags.

Answer 1

d) may be shorter or longer than monetary policy lags.

Step-by-step explanation:

Remember, the term policy lags refers generally to the lag or length of time between the time when an economic problem is discovered, like increased unemployment, and the extent to which policy solves the economic problem.

From a general perspective this policy lags in fiscal policy may be shorter or longer than monetary policy lags depending on the political and economic environment of the country.