Question

When the economy falters, people often look to the government to help push the economy forward again. In fact, the government uses many different tools to try to affect the economy. Economists classify these tools on the basis of ________ policy and ________ policy.

Answer 1

Answer: Monetary and fiscal policy

Explanation:

  The monetary and the fiscal policy are both used typically for restoring the economy by changing the overall interest rate and also influence the supply of the money.

The fiscal policy is the term which refers to the changing process in the tax rated by the government and on the other hand, the monetary policy is typically used to stabilizing the economy by the Federal reverse bank.      

 According to the question, the economists is basically classifying the given tool according to the monetary and the fiscal policy that helps in influencing the economy. Therefore, the given answer is correct.