How can governments utilize fiscal and monetary policies to combat economic recessions?

F is cal and mon et ary policies are two main tools that govern ments can use to combat economic re cess ions . \n \n F is cal policies refer to the actions that govern ments take to influence the economy through changes in tax ation , government sp ending , and other budget ary measures . During a re cess ion , govern ments can use fis cal policies to stim ulate economic growth by increasing government sp ending on infrastr ucture projects , social programs , and other initi atives that create jobs and boost economic activity . Govern ments can also reduce tax es to increase consumer and business sp ending , which can also help to stim ulate economic growth . \n \n Mon et ary policies , on the other hand , are actions taken by central banks to control the supply of money and credit in the economy . During a re cess ion , central banks can use mon et ary policies to increase the money supply and lower interest rates to encou rage borrow ing and invest ment . This can help to stim ulate economic growth by making it easier for business es and consum ers to access credit and invest in new projects . \n \n In summary , fis cal and mon et ary policies can be used together to combat economic re cess ions by increasing government sp ending , reducing tax es , and stim ulating borrow ing and invest ment . </s>