Question

There is a slow-down in a country's economy when it faces a pandemic. When the intensity of its spread has been controlled, it needs to be given an encouragement for a revival. Describe how monetary policies of the central bank, and fiscal policies of the finance ministry might be used for such a purpose. What are the rates to be reduced, and which totals must be raised as part of the two policies?

Answer 1

Answer:

Both monetary and fiscal policies are used to regulate economic activity over time. They can be used to accelerate growth when an economy starts to slow or to moderate growth and activity when an economy starts to overheat. In addition, fiscal policy can be used to redistribute income and wealth.

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