Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Question
Chapter 31, Problem 3DQ
To determine
The expenditure lag and policy lag in stabilization policy.
Expert Solution & Answer
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Students have asked these similar questions
Define the following:
-Inside lag
-Outside lag
Which has the longer lag-monetary or fiscal policy?
Which has the longer outside lag? Give reasons for your answer?
Can you explain policy lags briefly and compare fiscal and monetarypolicies with respect to inside and outside lags.
thanks.
Differentiate between fiscal and monetary policy in brief.
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Similar questions
- Do you think policy makers should attempt to stabilize the economy ? Why ?arrow_forward*Does monetary or fiscal policy have a longer time lag? Why?arrow_forwardExplain the difference between fiscal policy and monetary policy. What are some of the reasons these macroeconomic policies are used?arrow_forward
- What is the difference between monetary policy and fiscal policy ? Explainarrow_forwardAssume the economy has entered a recession. Identify two fiscal and two monetary policy actions that could be used to alleviate the recession and explain how each policy would improve the economy.arrow_forwardDistinguish between the administrative lag and the operational lag in stabilization policy. Does monetary policy or fiscal policy have the shorter total lag? Explain your answer.arrow_forward
- A stimulative monetary or fiscal action should increase aggregate demand. What factors may limit the actual increase in aggregate demand?arrow_forwardWhat are causes and effects of low policy ratesarrow_forwardWhat is the difference between fiscal and monetary policy? What fiscal and monetary steps can the government and the central bank undertake during times of recession to help the economy? What are the pros and cons of fiscal and monetary policy?arrow_forward
- Discuss some of the difficulties that may arise from enacting and carrying out fiscal policy and why some economists believe monetary policy is superior as a stabilizing mechanism.arrow_forwardIn theory, fiscal policy can be as effective in stabilizing the economy as is monetary policy. What are the practical reasons that modern nations typically rely on central banks and monetary policy for stabilizing output, employment, and inflation?arrow_forward
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