Question

Is stabilization policy more likely to be conducted through monetary policy or through fiscal policy? Why?

Short answer

It is easier to handle problems with monetary policy.

Step-by-step solution

Step 1. Introduction

The framework established by the central bank in order to accomplish economic growth and stabilise the country's economy is known as monetary policy.

Step 2. Explanation

Because it is easier to handle problems with monetary policy than with fiscal policy, stabilisation policies are typically performed via monetary policy. The fiscal policy necessitates modifications to the present tax system and government spending, as well as a lengthier implementation period.