Suppose that the real GDP is below potential GDP.
Subject: Economics / General Economics
Please address the following questions in a 4 page essay using the resources from online web sites.
a. What fiscal policy tools could be used to stimulate the economy?
b. What monetary policy tools can the Federal Reserve use to stimulate the economy and increase economic growth. Please identify at least two specific tools.
3.Both monetary policy and fiscal policy encounter the problems of lags. Discuss the kinds of lags they encounter and the degree of difficulties they present to policymakers.