(A) Inside lag is are delay in implementing policy. it can take additional time to enact policies, which is more monetary policy. outside lag is the time it takes for monetary policy to have an effect.
(B) Fiscal policy has a long inside lag—for example, it can take years from the time a tax change is proposed until it becomes law. Monetary policy has a relatively short inside lag. Once the Fed decides a policy change is needed, it can make the change in days or weeks.
(C) Monetary policy has a longer outside lag. Fiscal policy, despite having a larger inside lag than monetary policy, has a shorter outside lag. The long inside lag makes fiscal policy less useful for stabilization and means that fiscal policy tends to be used relatively infrequently to try to stabilize the economy.
Question 3) Inside and outside lags: A) What are the inside lag and the outside lag?...
Inside and outside lags: A) What are the inside lag and the outside lag? Explain using an example for each one. B) Which one has longer inside lag: Monetary or fiscal policy? Explain. C) Which one hs longer outside lag: Monetary or fiscal policy? Explain.
Which of the following statements is/are true? A. None of the statements are true. B. Outside Lag for Fiscal Policy is much shorter than Monetary Policy C. Inside Lag for Fiscal Policy is much longer than Monetary Policy. D. Inside Lag for Fiscal Policy is much shorter than Monetary Policy.
Which of the following lags is longest for monetary policy? O A. effectiveness lag B. implementation lag O C. variable lag O D. legislative lag Match each of the following statements with the type of lag it describes. Delays in the availability of timely and relevant data to be able to identify a problem can slow a potential policy response Even when data becomes available, it can take time to interpret what the data is signaling about the state of...
Question: I need help to describe how fiscal and monetary policies impact economic situations. Was it becau... I need help to describe how fiscal and monetary policies impact the US economic situations. Is the result of the impact due to the timing of the policies? What was the inside lag associated with these policies? How long was the outside lag? Could anything be done to decrease the length of these lags?
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When fiscal stimulus is being used to fight a recession, how long do the inside and outside lags last? a. Several decades b. Several weeks c. A year or two at least d. One to three months Report Problem NEXT QUESTION Other things being equal, when the effective multiplier for fiscal policy is 2, government purchases would require how much change to close a $500 billion negative output gap? ao $1 trillion increase b.o d.o $1...
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4. (5 points) What effect a selling bonds will have on the money market? Explain using bond prices. 5. (7 points) Assume that fiscal policy can be accomplished by changing only one of G and T. In the IS-LM framework, suppose the effect on the general equilibrium output is the same between expansionary fiscal policy and expansionary monetary policy. Which...
O Fed is split over time of rate rise In October 2009, the Fed was forecasting that unemployment will average 9.8 percent in 2010 and said the federal funds rate will remain "exceptionally low" for "an extended period." But some officials were beginning to worry about unwinding the $2 trillion in special credits that have boosted the monetary base and to wonder if the interest rate might need to start rising soon. Source: The New York Times, October 9, 2009...
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4. (5 points) What effect a selling bonds will have on the money market? Explain using bond prices. 5. (7 points) Assume that fiscal policy can be accomplished by changing only one of G and T. the IS-LM framework, suppose the effect on the general equilibrium output is the same between expansionary fiscal policy and expansionary monetary policy. Which one would you expect to have a greater impact on the equilibrium consumption? Explain in words. Hint:...
a) Explain how automatic stabilizers work, both on the taxation side and on the spending side, first in a situation where the economy is producing less than potential GDP and then in a situation where the economy is producing more than potential GDP. b) Do you think the typical time lag for fiscal policy is likely to be longer or shorter than the time lag for monetary policy? Explain your answer c) How would a balanced budget amendment change the...
C. When using NAT, Define and explain what are; outside local addresses, outside global addresses, inside global addresses and inside local addresses. What’s the difference? (Draw a diagram explaining this, as well).