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Question: Using 3 outside references and at least 1,500 words contrast fiscal policy and monetary policy, and explain how each affects the economy?

Fiscal policy is mostly centered on the thoughts of a British economist named John Maynard Keynes. Keynes was certain that governments are able to change economic performance by modifying tax rates and government spending. Later, it became known as Keynesian economics. This philosophy declares that governments are able to raise or lower tax levels and public spending, which would influence macroeconomic productivity levels. When studying economics, fiscal policy is explained as the use of government revenue collection and expenditure to influence the economy. Higher tax rates are most likely to slow down the economy because they pull money away from the private sector and put that money into the government. Many small business owners become discouraged when the tax rate is increased because they lower the profits businesses can earn and make the effort less rewarding. It is then understood that decreased tax rates will improve the economy unlike increased tax rates. Regulators sometimes try to increase unemployment rates, control inflation, make business cycles steady, and influence interest rates in an effort to control the economy. Regulators will do all of these things through fiscal policy. There are two leading instruments of fiscal policy. The first one is the modifications in the level and composition of taxation. And the second one is known as government spending in numerous areas. Both of these changes can alter the economy is many ways such as, the aggregate demand and economic activity level, the prototype of resource allocation within the government sector and similar to the private sector, and the distribution of income. Think about an economy that is going through a period of recession. A period of recession is when two or more consecutive quarters of decline in the gross domestic product (GDP)....