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

ACongress and the President can act quickly to change monetary policy.
BThe Federal Open Market Committee must get Congressional approval.
CIt can take a long time for new government spending to take effect.
DThe Federal Open Market Committee can act almost immediately.

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Answer: D. The Federal Open Market Committee can act almost immediately


The inside lag for monetary policy is shorter than the fiscal policy simply because there is an available data on inflation and even employment rate therefore the federal can make decisions instantly based on the available data.

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