U.S Government question

Question

 For each situation, give an example of a fiscal policy and a monetary policy solution.



1.- Rapid investment during a boom period threatens to overheat the economy.

Fiscal policy solution: 

Monetary policy solution:

2.- Layoffs lead to an economic slowdown.

Fiscal policy solution: 

Monetary policy solution:

Answer 1

Question 1:

Fiscal Policy solution would be for Congress and President to decrease government investment to slow the economy down

Monetary Policy solution would be in increase interest rates to slow borrowing down

Question 2

Fiscal Policy solution would be to provide unemployment benefits and/or for government to create jobs

Monetary Policy solution would be to lower interest rates in hopes businesses borrow money to increase economy