00:01
In stabilizing the economy, the government plays the role of determining both fiscal and monetary policy.
00:13
Now, fiscal and monetary policy, as we're probably familiar with, can be either expansionary or contractionary, and that's going to depend on where the economy is, what condition the economy is currently in, and which route would be best to sort of rectify whatever problem needs, stabilizing, of course.
00:29
However, there are some definite tradeoffs that come with fiscal and monetary policy, in the sense of, we have obviously expansionary versus contractionary, but that's not necessarily a tradeoff versus just differing factors.
00:43
But we have these long run and short run tradeoffs that need to be considered.
00:52
What impact might a monetary policy have in the short run that may definitely help stabilize the economy? however, in the long run, that may potentially be damaging.
01:02
Fiscal policy, when we look at that that's that policy that is made by the legislators.
01:06
And oftentimes it has a bit of a lag in actually taking effect...