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Why are monetary policy lags generally shorter than fiscal policy lags?
Monetary policy lags are generally shorter than fiscal policy lags because central banks can implement changes quickly through mechanisms like interest rate adjustments or open market operations, which can be executed almost immediately. In contrast, fiscal policy involves a more complex legislative process, requiring proposals to be drafted, debated, and approved by various government bodies, which can take considerable time. Additionally, the impact of monetary policy tends to be more immediate, while fiscal measures often require time to be enacted and for their effects to materialize in the economy.
Which demand can become more elastic over time what changes can take place in the long term to affect demand?
Gasoline
Why do economists differ regarding their views on fiscal and monetary policy?
Economists differ in their views on fiscal and monetary policy due to varying theoretical frameworks, beliefs about market efficiency, and interpretations of historical data. Some emphasize the effectiveness of government intervention through fiscal policy to stimulate demand during economic downturns, while others prioritize monetary policy and the role of central banks in managing inflation and interest rates. Additionally, differing assumptions about how quickly and effectively policies take effect can lead to contrasting opinions on their appropriateness and effectiveness in different economic contexts. These ideological differences and empirical interpretations contribute to the diversity of thought in economic circles.
What is fiscal poilcy?
Fiscal Policy is the use of TAXES and GOVERNMENT SPENDING to manipulate the level of aggregate demand in the economyFiscal policy is the government's policy and plan for dealing with the budget for the year.Fiscal policy is the government's policy and plan for dealing with the budget for the year.
What is the difference between fiscal policy and monetary policy?
The government uses both fiscal and monetary policy to stimulate the economy (get it growing) and also to slow the rate of growth down when it gets overheated. With fiscal policy the government influences the economy by changing how the government collects and spends money. The most common tools that the government enacts to effect fiscal policy include:• Increased Spending on new government programs and initiatives (such as job creation programs). This has the effect of increasing demand for labor and can result in lower unemployment levels• Automatic Fiscal Programs are programs that take effect immediately to help correct the slide in the economy. Probably the single best example of this is unemployment insurance which a person can file for as soon as they lose their job.• Tax Cuts are another tool that government uses to stimulate demand for goods and services when the economy takes a turn for the worse. The effect of a tax break is to put more money back in the pockets of businesses and consumers which they can spend and put back to work in the economy.Monetary Policy, on the other hand, involves the manipulation of the available money supply within the economy. In the United States, the role of manipulating the money supply falls to the Fed or the central bank in the US. Not only does the Fed have overall responsibility for the country's monetary policy, but it also has responsibility for issuing currency and overseeing bank operations. An increasing money supply puts more money in the hands of consumers which they turn around and spend - a decreasing money supply does just the opposite.In order to increase or decrease the money supply, the Fed has four principal levers which it pulls to try and effect change. The first thing that the Fed can do is to alter the reserve ratio which is the percentage of assets that commercial banks have to keep on deposit at one of the Federal Reserve Banks - the higher the reserve ratio, the less money that banks can lend out to the general public.Another way the Fed can control the money supply is by adjusting the federal funds rate (fed funds rate). The federal funds rate is a short-term borrowing rate that banks have established amongst themselves for short-term borrowing. Another way the Fed can adjust the money supply is by raising or lowering the discount rate which is the rate at which commercial banks can borrow money from the Fed. The higher the rate (or interest charged on the loan), the less inclined commercial banks are to borrow and a smaller amount of money will be available in the market. And lastly, the Fed can buy and sell government bonds. The buying of bonds translates into income for the US government, which can in turn put more money into the economy.i
What is the nickname for a series of US government spending cuts and tax increases that could take effect in January?
I Believe it is the Fiscal Cliff
How long does it take for dewormer to take effect in cats?
Dewormer typically takes about 24-48 hours to take effect in cats.
How long does it take for Demerol tablets to take effect?
about a half an hour
In a Cisco router when do changes made to the running-configuration take effect?
as the commands are entered
What does fiscal mean in scottish?
A Fiscal, or Procurator Fiscal, is a public prosecutor in Scotland. The Fiscal does not appear in court, but decides which cases will be prosecuted, and which form the trial will take. They have a similar role to the director of public prosecution in England,
How long did it take for Chlorine gas to take effect?
2-3 hours
How long does it take for mustard gas to take effect after exposure?
12 hours
When does the new health insurance law take effect?
The new health insurance law will take effect on January 1, 2014. The Affordable Care Act is already beginning to implement the changes that will effect our healthcare system. While these changes are minor, expect the new system to be in place at the beginning of the new year.
What is the function of testerrone?
How long does testerone gel which one rubs in take to take effect?
What is effect of intoxication?
Emotional difficulties, behavior changes, impaired judgment and personality changes take place. Such as slurred speech, incoordination of body movements.
What must happen before the owa changes that you made take effect?
You must restart the IIS server
How long does a computer virus take to effect your computer?
1 second
