Respuesta :
Contractionary fiscal policy and the contractionary monetary policy both shift AD curve to the left.
What is a monetary policy?
Maintaining price stability and public confidence in the currency's value and stability is the aim of monetary policy. It is a tactic used by a country's monetary authority to manage the money supply or the interest rate payable on extremely short-term borrowing, typically in an effort to cut inflation or the interest rate. As opposed to this, fiscal policy relies on taxes, government spending, and government borrowing as instruments for a government to influence business cycle phenomena like recessions. Monetary economics can provide some valuable insight into how to formulate the optimum monetary policy. In industrialized countries, monetary and fiscal policies are often made separately. The descriptions include both contractionary and expansionary monetary policies.
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