Which policy is effective in the intermediate range?
A)Monetary policy
B)Fiscal policy
C)Both policies
D)None of these

Question

Quizplus · Accepted Answer

Both monetary and fiscal policies can be effective in the intermediate range. Monetary policy, managed by a country's central bank, involves managing interest rates and money supply to influence economic activity. Fiscal policy, managed by the government, involves changing tax rates and levels of government spending to influence economic activity. Both can adjust demand in the economy, affecting output and employment levels over the intermediate term.

Which Policy Is Effective in the Intermediate Range