Answer to Question #301728 in Economics for munna

Question

what is the difference between austerity and stimulus? which tack does the european union follow? how is it different from what the united states has done? which do you think is a better approach. please answer in detail.

Answer 1

Austerity refers to economic policies undertaken to control public sector debt by a government. On the other hand, stimulus refers to an action undertaken by the government to increase economic activities by taking part in fiscal policy as well as specific expansionary monetary policies.