Final answer:
To fund war efforts, governments implement fiscal policies such as increasing military spending and raising taxes, and monetary policies like keeping interest rates low and increasing the money supply.
Step-by-step explanation:
Examples of fiscal policy used to fund the war effort include changes in federal spending, such as an increase in defense and military expenditures, or changes in taxes, like implementing a war tax to directly fund military needs. An example of fiscal policy during wartime is how the U.S. government during World War II increased spending on defense and raised taxes to support the war effort. Conversely, monetary policy includes actions like altering the interest rate or changing the money supply.
A historical example of monetary policy is how many central banks during wartime kept interest rates low and increased the money supply to enable governments to borrow money more cheaply to fund the war. However, not all changes in taxes and spending can be classified as fiscal policy; for example, changes aiming at social welfare or other domestic programs may not have a direct impact on the economy in the context of war financing and therefore wouldn't be considered as fiscal policy targeted at funding war efforts.