Fiscal and monetary policy

Studies indicate that the changes in fiscal and monetary policy affect the 3 economic agents in the economy (households, firms and government). How do the changes in monetary and fiscal policy instruments affect you personally or work wise?

Policymakers who want to stabilize the economy must decide how much to change the money supply, government spending, or taxes. Why is it difficult for policymakers to choose the appropriate strength of their actions? Which method do you think is better in the long run? Why?

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