Aggregate Demand – Aggregate Supply model

QUESTION 1 :
In your opinion have the recent U.S. monetary and fiscal policy been effective at stabilizing the U.S. economy? Use
the AD/AS model to explain your answer

SAMPLE ANSWER:

In my opinion the current monetary and fiscal policies of the U.S has been very effective at stabilizing the U.S. economy. The overall pace in which the economic activities are involved must be managed efficiently, to maintain good employment rate and nominal prices. The United States government employs two tools to achieve this economic stability, and they are the fiscal
policy and the monetary policy .Through the fiscal policy, the U.S. government determines the level for taxes and spending of money. With the help of monetary policy, it can manage the supply of money.

QUESTION 2 :
What impact do you think the recent stabilization policies will have on our future standard of living? Use the AD/AS model and growth theory explain your answer

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