Question

Sometimes, the government and the Federal Reserve pursue conflicting goals. For example, the government may choose to carry out _____ to encourage economic growth. But the Federal Reserve may carry out _____ to reduce inflation.
expansionary monetary policy, contractionary fiscal policy
contractionary fiscal policy, expansionary fiscal policy,
expansionary fiscal policy, contractionary monetary policy

Answer 1

Answer:

expansionary FISCAL policy, contractionary MONETARY policy

Explanation:

Government controls FISCAL policy, FED controls Monetary policy.

Expansionary policies are used to grow

Contractionary policies are used to reduce

Answer 2

Answer:

Expansionary monetary policy and Contractionary fiscal policy

Explanation:

The use of tax policy and government spending to influence the economy is called Fiscal policy. Expansionary fiscal policy occurs when the government cuts the tax rates and increases spending while the contractionary fiscal policy occurs when it increases taxes and decreases the government spending. There are two type of fiscal policy Automatic stabilisers and discretionary fiscal policy. Automatic stabilisers are passive economic policy while the discretionary fiscal policy is active fiscal policy.