The appropriate fiscal policy stance depends, at least partly, on the
A)stance of trade policy.
B)stance of monetary policy.
C)party in power in Congress.
D)party in power in the presidency.

Question

Quizplus · Accepted Answer

The appropriate fiscal policy stance depends, at least partly, on the stance of monetary policy. Fiscal policy and monetary policy work together to influence the economy, and the coordination between the two is important for achieving the desired economic outcomes. For example, if the Federal Reserve is pursuing an expansionary monetary policy by lowering interest rates, then it may be appropriate for the government to pursue a contractionary fiscal policy by reducing spending or increasing taxes in order to prevent the economy from overheating and causing inflation. On the other hand, if the Federal Reserve is pursuing a contractionary monetary policy by raising interest rates, then it may be appropriate for the government to pursue an expansionary fiscal policy by increasing spending or reducing taxes in order to stimulate economic growth.

The Appropriate Fiscal Policy Stance Depends, at Least Partly, on the