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Compare and contrast the strengths and weaknesses of fiscal policy and monetary policy.
However, to help you get started, concentrate on two distinct chapters in the Schiller textbook. See chapter 11 for an analysis of the strengths of fiscal policy, with some weaknesses. See chapter 12 for key limitations to fiscal policy. See chapters 13, 14 and 15 to see how monetary policy works, and its benefits. Concentrate on chapter 15 to find the failings and problems with monetary policy.
Hints — Within your answers, consider the following:
–Identify and summarize the market dynamics involved in both kinds of centrally coordinated policies.
–Who is in charge of these policies, and how do their different multipliers work?
–Given your analysis here and, using your knowledge from ALL of the material we have covered this semester, what are the best ways to solve macroeconomic problems such as unemployment and inflation, or even political economy issues like inequality?
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