Question

A goal of monetary policy and fiscal policy is to

Answer 1

Answer:

B. Offset shifts in aggregate demand and thereby stabilize the economy.

Explanation:

Firstly about Fiscal Policy:

-Monitoring and influence of government to national economy by adjusting its spending levels and tax rates

-Based on the Keynesian economics which opines that the increasing or decreasing taxes or the same about public spending will impact significantly on the economy of the country.

-Fiscal Policy is the regulator of the inflation rate (2%-3% is normal for every economy) and in turn, this increase the rate of employment

Secondly about Monetary Policy:

- In most countries, central banks or central boards take the actions of plan about controlling process of the money in the country or money supplying estimations.

-Monetary policy is the management of money supply or the interest rates

-Monetary policy is the controlling of inflation, consumption, growth and liquidity of money

The mutual goals of these policies aim to establish and construct the perfect economic environment with the stable and positive growth of economy and, stable and low inflation rates. Moreover, the aim is the elimination of booms or fluctuations on the economy and to keep it stable as possible as.