) What would be the ideal kind of coordination between fiscal and monetary policies when the economy falls into a recession?
Answer the time of recession, recession is a situation when there is less output , employment takes place. Due to it , economic growth slows down. To save the nation from recession both central government and central bank are responsible. They both can interdependently work with the open market operations.
Open market operations are the sale and purchase of government securities. At the recession , expansionary monetary policy is adopted . Under it , central bank purchase government secures and increase money supply . In this way recession is controlled with the coordination between fiscal and monetary policy.
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