Question

Please answer ASAP, thank you!

1. Please present, analyze, and comment on a (specific or general) monetary or fiscal policy enacted by the Federal Reserve Bank or by the Federal Government to help our economy by describing the particular context in which that policy was enacted.

Answer 1

The recently, the COVID-19 has led to the recessionary pressure in the economy, The aggregate demand is down unprecedently. Thus, here expansionary monetary and fiscal policies have been announced by the central bank and government respectively.

The fiscal policy has been announced by the government where the government has increased its expenditure massively to the tune of over 2 trillion dollars. it would help to prevent the fall in the aggregate demand in the economy thereby causing the upward movement in the GDP of the country. But still, there is no breakthrough in the development of medicines for the COVID-19, thus further stimulus packages are required to pump prime the economy else the economy might slip into the deep recession. The inflation might rise over 10 % of the labor force. Thus, here single fiscal or monetary policies would not be enough effective, here both policies must be used in expansionary manners to prop up the aggregate demand in the economy since the recession is deficient demand induced.