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We discussed fiscal policy (FP, chapter 7) and monetary policy (MP, chapter 9). Based on the what you have learned, material covered in class and
We discussed fiscal policy (FP, chapter 7) and monetary policy (MP, chapter 9). Based on the what you have learned, material covered in class and the assignments. Which policy is more effective? Fiscal policy or monetary policy? Or a mix of both policies? By effective I mean how effective is FP and MP at increasing the level of output relative to full-employment output? In the pandemic, we know that real output is below full employment output. To reach full employment output, will FP, MP or a mix of both policies achieve this goal.
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