contestada

Explain how implementation of fiscal policies and monetary policies can both be utilized to increase
consumer and business spending and spur economic growth. Which of these policies will impact the
federal budget and how? (4 points)

Respuesta :

Fiscal policies such as the decrease in taxes can be used to increase consumer spending. Increased consumer spending leads to increased growth.

How does monetary policy create growth?

Monetary policy (that is an increase in the money supply) can be used to stimulate growth because, the more money you have in circulation, the higher the aggregate demand.

This also spurs economic growth. A decrease in taxes will impact the federal budget because the fewer taxes the government collects, the less money it has to run the government and the economy, hence budget deficits.

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