Essay: The Applied Fiscal and Monetary Policies

The applied fiscal and monetary policies are intended to stimulate the economic growth, restrain inflation, promote investment and develop infrastructure. With increased and fast economic growth, the economy’s equilibrium increases. This can be explained through the expenditure multiplier effect in that with increases in consumption, the GDP grows with the rate of the increased multiplied by the multiplier effect on expenditure.

The identified variables in this case are increased consumption, decrease in inflation and increase in unemployment benefits.  A short term outlook for them is as follows:

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