what are the negative effects, of using fiscal and monetary policy, to get stable prices and low unemployment?

Question

I'm not saying stable prices and low unemployment are bad, I'm asking if the governments use of fiscal and monetary policy , to get them is bad.........

Answer 1

Using those tools tend to accomplish short term goals, while creating budget deficits and inflation in the long term.

Answer 2

The problem with trying to control inflation and unemployment are they move opposite each other. By this I mean that if you lower inflation then the unemployment rate will rise. This is the traditional view in economics. Recently some economists are speculating that this is not the case in the short run anymore.

Using fiscal policy will not take place right away. For example if congress decides to lower unemployment they will spend more money in the economy then they take in with taxes. This will take time to implement because congress can not instantly start spending money.

In this case I feel that if you want to control inflation or unemployment then you should use a monetary policy.

Answer 3

When fiscal and government policies are used it is not solving the problems. If jobs are scarce then that indicates that we are not being productive and that resources are standing idle. If we are not being productive then there are limited resources which drives price up. So instead of using fiscal and monetary policies to get stable price and low unemployment lets find ways to increase investment that will increase jobs and stabilize prices

Answer 4

to expensive.