Fiscal & Monetary Policy - Macro Topic 5.1

The video tutorial by Mr. Clifford on ACDC Econ reviews fiscal and monetary policy in macroeconomics. It explains the three economic states: recession, full employment, and inflationary gap. For a recession, options include no policy, fiscal policy (government spending and taxation), and monetary policy (money supply control). The video details how these policies affect aggregate supply and demand. It also covers inflation, where similar policy options apply, affecting the economy differently. The tutorial emphasizes understanding policy impacts on economic graphs.

Explain how increasing government spending can help during a recession.

What actions can the central bank take to decrease the money supply?