Monetary policy and fiscal policy

问题如下：

QuestionWhen stable inflation is present, a combination of tight fiscal policy and easy monetary policy will most likely:

选项：

A.An increase in the private sector share of GDP.

B.No impact on the private sector share of GDP.

C.A decrease in the private sector share of GDP.

解释：

1. Correct. When a tight fiscal policy is combined with easy monetary policy and low interest rates, the private sector is usually stimulated, leading to an increase in its share of GDP.
2. Incorrect. If tight fiscal policy is accompanied by easy monetary policy and low interest rates, the private sector's share of GDP typically increases, and there is an impact on the GDP composition.
3. Incorrect. If tight fiscal policy is accompanied by easy monetary policy and low interest rates, the private sector's share of GDP typically increases, and there is no decrease in its share.

• explain the interaction of monetary and fiscal policy