Question

Which economic policy tools has the Italian government used in 2020 to lower the impact of the pandemic on Italian economy? What policy tools ECB has used to support the Euro-zone? Explain how these tools are expected to help the Italian economy. Would you have used these tools? Explain why or why not?

Answer 1

The economy policy tools have the Italian government used in 2020 lower the impact of the pandemic on Italian economy is the increase in the government expenditure and to use the monetary supply resources and Infuse the money in the economy to give expenditure support to raise the economic condition of all the sectors.
The economic policy used by ECB to support the eurozone is the injection of money in the economy to give support to the industrial units to cover up the expenses and to control the various cost which includes fixed cost and variable cost in the economy
The injection will raise the situation of industrialisation in the economy so that the industrial unit can be here the working capital cost and to reach the production efficiency because production consumption and distribution are the three important factor in the economy and if there is no production then there is no consumption and without production and consumption there is no distribution so in this case economic structure will not run smoothly and properly.
Now many countries are using these tools to manage their economy and enabled the economy to survive in this pandemic but there is a limitation of this infusion of money in the economy because sometimes it raises the inflation rate and it hampers the economic structure if after infusion there will be no production activity.