The first alternative is correct.
Political economy can often be conflicting.
The main instruments of economic policy are monetary policy and fiscal policy. Both can be used to stimulate or discourage the economy. In this way, when they are adopted with the opposite sign, they are an example of conflict, as described in this exercise.
If the government wants to stimulate the economy through increased spending (expansionary fiscal policy), it will be injecting money into the economy. However, the main cause of inflation is excess currency in circulation. Thus, a contractionary monetary policy aims to wipe out the supply of money to contain inflation. That is, the first measure is inflationary to stimulate the economy, but the second is anti-inflationary, however contractionary.
<em>"Suppose the government and the Federal Reserve have conflicting goals. The government wants to encourage economic growth by </em><em>increasing spending</em><em>, but the Federal Reserve wants to decrease inflation by </em><em>decreasing the money supply</em><em>".</em>
<span>They held another election in hopes of getting reelected to the Assembly.</span>
Answer:
Economics is described as a social science focused on studying the ordinary business life of people involving their relationship with utility, particularly in production, consumption, and distribution of products and services. It is used in different fields to portray scarcity and utilization of available resources. Therefore, economics exists in any situation that involves the addition of an item which causes a decrease in another. Different economists have designed theories to explain various economic concepts and principles.
