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Left on its own the economy will self-correct towards an equilibrium state. However, the government will use fiscal and monetary policy to help stabilize the
Left on its own the economy will self-correct towards an equilibrium state. However, the government will use fiscal and monetary policy to help stabilize the economy.
- In your words define both fiscal and monetary policy. - Describe how the government uses each policy if the economy is too hot and inflation is rising rapidly. - Describe how the government uses each policy if the economy seems to be slipping into recession. - Which policy do you prefer? Provide reasons for your preference
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