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Why Is the Time Lag for Fiscal Policy Changes Longer

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Why is the time lag for fiscal policy changes longer than for monetary policy changes?


Definitions:

Isoelectric Line

A baseline in an electrocardiogram (ECG) from which the electrical activity of the heart is measured.

Intervals

Periods or durations of time between two events or points in time, often used in reference to exercise, physiology, or musical rhythm.

ECG

Electrocardiogram: a test that records the electrical activity of the heart to show abnormal rhythms and detect heart problems.

Cardiac Muscle Cell

A specialized type of muscle cell found in the heart, responsible for contracting and generating the force that pumps blood throughout the body.

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