Explain why stabilization policy are more often implemented using fiscal than monetary policies.
Be sure to respond to at least one of your classmates’ posts in 1-2 sentences:
Monetary policy is used to pursue stabilization measures. The central banks manipulate the money supply, interest rates and credit in an attempt to fix the overall economy. Inflation is discouraged by higher interest rates, which in turn reduces the demand for goods. Inflation targeting is the most popular form of monetary policy.
Policy for Monetary Stabilization
Answer
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