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Asked by Kailyn Holmes on May 31, 2024

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For the most part, fiscal policy affects the economy in the short run while monetary policy primarily matters in the long run.

Fiscal Policy

Government adjustment of its spending levels and tax rates to monitor and influence a nation's economy.

Monetary Policy

A government or central bank policy aimed at controlling the money supply and interest rates to influence economic activity.

Short Run

A period in economics during which at least one input is fixed, limiting the capability of the economy or business to adjust to changes in demand or conditions immediately.

  • Master the basic concepts of monetary and fiscal policies and their effects on total market demand.
  • Understand the effects of modifications in monetary policy on economic performance in the immediate and distant future.
  • Understand how fiscal policy influences the economy primarily in the short run.
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Zybrea KnightJun 03, 2024
Final Answer :
False
Explanation :
Fiscal policy, which involves government spending and taxation, can have both short-term and long-term effects on the economy. Monetary policy, managed by a country's central bank through mechanisms like interest rates and reserve requirements, can also impact the economy in both the short and long run, influencing inflation, employment, and overall economic growth.

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