For the most part, fiscal policy affects the economy in the short run while monetary policy primarily matters in the long run.

Question

Quizplus · Accepted Answer

Fiscal policy, which involves government spending and taxation, can have both short-term and long-term effects on the economy. Monetary policy, managed by a country's central bank through mechanisms like interest rates and reserve requirements, can also impact the economy in both the short and long run, influencing inflation, employment, and overall economic growth.

For the Most Part, Fiscal Policy Affects the Economy in the Short