Fiscal policies effect on the economy?

Question

I'm working on Macroeconomics and I'm trying to understand fiscal and monetary policy. The question is:
a.) When the economy is under potential GDP, what fiscal policies will bring it back to potential?
b.) What monetary policies will bring it back to potential?
c.) What will the effect of these policies be on price level?
d.) What will the effect be on unemployment?

Please note that this isn't a graded assignment. I'm just trying to understand and my book isn't very clear.

Answer 1

a. Potential policies that would bring it back to potential include lowering taxes to fuel economic growth, providing incentives to individuals who will innovate and improve technology, etc. In general, fiscal policy has several drawbacks, generally through greater inflation, crowding out, or some such thing.
b. Lowering interest rates. This makes it easier for businesses to borrow money, and thus will cause them to expand, pumping up GDP.
c. Fiscal policy causes prices to go up more than monetary policy. Monetary policy does have some inflation, but less of it.
d. Unemployment will not be changed significantly in fiscal, but will go down due to growth in monetary policy.