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Discussion: Monetary and Fiscal Policy Applications
This Discussion focuses on the effects of monetary and fiscal policy instruments on the aggregate demand in the economy. The specific areas of discussion include how monetary and fiscal policy instruments are used to change AD, the differences between monetary and fiscal policy, and their respective instruments.
Read chapters 13 and 15, and remember to include references and links to the websites that are important contributors to your posts (comments).
Monetary and fiscal policy instruments are used to affect the aggregate demand (AD) in the economy.
a. What is the difference between contractionary and expansionary monetary policy? What is the difference between contractionary and expansionary fiscal policy? How does each policy affect the AD in the economy?
b. What are the benefits and major problems of the fiscal policy and monetary policy?
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