Answer to Question #214764 in Finance for judas

Question

The spread of COVIC-19 across all countries of the world resulted in resorting to various forms of lockdown measures. The locks down measures crippled many economies including the South African Economy. To resuscitate these economies, there is renewed interest in fiscal policy as a tool macroeconomic policy. Critically discuss the shortcomings of anti-cyclical policy?

Answer 1

The anti-cyclical policy will lower the interest rates to increase the money supply to the economy. This will lead to unemployment because companies will try to reduce costs incurred by laying off workers.