Question

A fierce debate exists between policymakers as to whether or not they should use monetary and fiscal policies to stabilize small fluctuations in the economy. Please determine which of the given statements could be used to support using policy to stabilize the economy and which might be used against such choices. In favor of using policy Not in favor of using policy

Answer 1

Hello the options related to your question is missing attached below are the missing options

answer :

In favor of using policy

• Fiscal policy can be used to cut spending and rein in excessive aggregate demand. This controls inflation
• Policy makers can expand the money supply in order to increase aggregate demand

Not in favor of using policy

• Fiscal policy, in particular is subject to long delays in the political process, which can affect its usefulness
• Monetary and fiscal policy only take effect after a long lag
• Because of the imprecision of economic forecasting, policy makers may end up causing more harm to the economy than good

Step-by-step explanation:

Fiscal policy is simply the use of government, taxing and spending policy to influence the economic conditions of the country positively over time. and it can come in either ways. i.e. increase in government spending or lowering taxes by the government

In favor of using policy

• Fiscal policy can be used to cut spending and rein in excessive aggregate demand. This controls inflation
• Policy makers can expand the money supply in order to increase aggregate demand

Not in favor of using policy

• Fiscal policy, in particular is subject to long delays in the political process, which can affect its usefulness
• Monetary and fiscal policy only take effect after a long lag
• Because of the imprecision of economic forecasting, policy makers may end up causing more harm to the economy than good