Answer:
answer
Explanation:
The two most well-known mechanisms for influencing a country's economic activity are monetary policy and fiscal policy. Central banks, such as the Federal Reserve of the United States, are in charge of monetary policy, which is primarily concerned with the regulation of interest rates and the total amount of money in circulation. 1 Governments' taxing and spending acts are referred to as fiscal policy. The executive and legislative branches of the government in the United States decide national budgetary policy.
It should be noted that fiscal policy affects aggregate demand through the changes that the government makes regarding taxation and spending.
Monetary policy also affects the money supply in the economy. The government can use contractionary fiscal policy to slow down economic activity.
These can include decreasing government spending, increasing tax, etc. This can slow down economic activity.
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