Answer to Question #283035 in Macroeconomics for Shiva

Question

Discuss the conditions under which Monetary Policy and Fiscal Policy multipliers

are zero

Answer 1

The maximum amount of commercial bank money created in the economy is determined by the monetary policy multiplier. When each branch of government focuses on its strengths, the policy is most effective. As a result, the Fed should focus on maintaining monetary stability. Consider the statements that Fed officials make on a regular basis while the monetary offset is in operation.