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Monetary vs Fiscal Policy

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Monetary or fiscal policy has been more effective in practice in stabilizing the business cycle? Why?

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The solution discusses if monetary or fiscal policy has been more effective in practice in stabilizing the business cycle and why.

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Monetary policy is considered the most effective for stabilizing the business cycle because fiscal policy is limited in two ways. Fiscal policy is limited primarily by its speed of implementation. For example, by the time the government is aware that there is a recession, makes a law, and puts law into effect, the recession may very over. It takes even more ...

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