Discussion Topic 6: Using Monetary and Fiscal Policy to Stabilize Aggregate Demand Suppose that survey measures of consumer confidence indicate a wave of pessimism is sweeping the country. If policymakers do nothing, what will happen to aggregate demand? What should the Fed do if it wants to stabilize aggregate demand? If the Fed does nothing, what might Congress do to stabilize aggregate demand? Would these monetary and fiscal policies be considered expansionary or contractionary? How would critics of active monetary and fiscal policy respond to the above proposals to stabilize aggregate demand? (For practice for your final exam, you may want to graph this shift in aggregate demand, along with the short-run and long-run aggregate supply curves. But you need not post a graph to answer the above questions.)