Fiscal and monetary stimulus differ qualitatively in the effect on
A) output.
B) interest rates.
C) the price level.
D) unemployment.

Question

Quizplus · Accepted Answer

Fiscal and monetary stimulus differ qualitatively in their effect on interest rates. Fiscal stimulus, which involves government spending and tax cuts, can lead to higher interest rates by increasing demand for funds, while monetary stimulus, typically involving the central bank lowering interest rates or buying securities, directly targets lower interest rates to spur economic activity.

Fiscal and Monetary Stimulus Differ Qualitatively in the Effect on