“The indirect nature of monetary policy may be harder to control that the more direct fiscal policy”. Based on your understanding, explain the above statement.

The correct answer to this open question is the following.

Based on my understanding, I can explain this quote in the following way.

It is harder for the Central banks of the countries to manage and control the money supply in a country and also the interest rates of this money. The central banks want to stimulate a weak economy, and for that to happen, they have to create a stimulus such as the reduction of interest rates when borrowing money to people and companies in order to strengthen the money supply.

The direct fiscal policy is an easier method of control used by governments and central banks because, with this policy, they just increase taxation to earn more money. However, the government can also use the opposite action, to reduce taxation to support the economy by spending more money on the creation of programs and infrastructure.

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