Final answer:
Fiscal policy that is supportive of the nation's monetary authorities is meant to control aggregate demand. For example, expansionary fiscal policy, which involves increasing government spending or reducing tax rates, can help boost aggregate demand during contractionary periods of the economy.
Step-by-step explanation:
Fiscal policy that is supportive of the nation's monetary authorities is meant to control aggregate demand. Fiscal policy that is supportive of the nation's monetary authorities is meant to control aggregate demand. For example, expansionary fiscal policy, which involves increasing government spending or reducing tax rates, can help boost aggregate demand during contractionary periods of the economy.
When the central bank, such as the Federal Reserve, implements monetary policy to influence the availability and cost of money, fiscal policy can complement these efforts by adjusting government spending or taxation policy to regulate aggregate demand. For example, expansionary fiscal policy, which involves increasing government spending or reducing tax rates, can help boost aggregate demand during contractionary periods of the economy.