Question

Effectiveness of monetary policy and fiscal policy

Answer 1

Heya friend,

If the economy is in the Keynesian range, monetary policy is ineffective and fiscal policy is highly effective. On the other hand, in the classical range, monetary policy is effective and fiscal policy is ineffective. But in the intermediate range both monetary and fiscal policies are effective.

Answer 2

If the economy is in the Keynesian range, monetary policy is ineffective and fiscal policy is highly effective. On the other hand, in the classical range, monetary policy is effective and fiscal policy is ineffective. But in the intermediate range both monetary and fiscal policies are effective.