Question

Interdependence of monetary and fiscal policies monetary

Answer 1

When an economy is a part of a monetaryunion, its monetary authority is no longer able to conduct its monetary policiesindependently in response to the needs of the economy. Under such a situation the interaction between fiscal and monetary policies undergoes certain changes

Answer 2

Explanation:

There is also a degree of policy interdependence: fiscal policy that focuses on keeping debt under control tends to accompany monetary policy that focuses on keeping inflation under control, and monetary policy that does not increase interest rates actively tends to accompany fiscal policy that does not pay attention ...