A recession can be defined as “a significant decline in activity throughout the economy, lasting more than a few months” (Investopedia) and can be indicated by macroeconomic indicators such as gross domestic product, investment spending, employment, household income, corporate profits and inflation decline, while at the same time unemployment and bankruptcies increase. Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”?Get the original essayMonetary policy is a policy that determines the rate and magnitude of growth in the money supply and has a direct effect on the interest rate in order to maintain stable prices and a low unemployment rate. Monetary policy is maintained by actions such as increasing the interest rate and changing the amount of bank reserves. Fiscal policy is the use of government spending (spending) and revenue (taxes) to influence the economy. (O’Sullivan, 2003). Fiscal policies attempt to control inflation, improve unemployment rates, and influence interest rates to better control the economy. The Great Recession of 2008 began with the subprime mortgage crisis in the United States, caused by an increase in subprime mortgage delinquencies and foreclosures; other factors include the bursting of the housing bubble, where the real estate sector peaked in 2006 at unsustainable levels that led to a collapse. Additionally, between 2002 and 2008, it was exceptionally easier to obtain credit, which led to high-risk lending and borrowing practices. The recession began in the United States, but its effects were eventually felt around the world, making the 2008 recession the worst global recession since World War II. The Federal Reserve, the Securities and Exchange Commission, and the Treasury have moved quickly to implement policies in response to the economic crisis. (Kitromilidies, 2012)In 2008, the Economic Recovery Act was passed with the aim of stimulating the economy through tax incentives and targeted government spending; the total cost of the bill was estimated at $152 billion. (Hopson, 2008). Targeted individual tax cuts were provided in increments of $300 per person, or $600 per married couple if filing jointly, for individuals earning less than $75,000 per year or $150,000 for married couples. (Hopson, 2008). Additionally, individuals received $300 per dependent child, with the total rebate not exceeding $600 per individual or $1,200 per married couple; In total, $100 billion in tax cuts were granted. The goal of the economic stimulus law was to increase consumer spending through rebates and increase business spending through targeted tax incentives. (Hopson, 2008) Many economists were skeptical that consumers would be able to quickly spend the rebates provided under the Economic Recovery Act. Instead, they suggested that the stimulus would be spent over a period of years, while many consumers would choose to save during slow periods, making this situation more difficult. fiscal policy is useless. A study conducted during the first wave of rebate checks showed that consumer spending on durable goods increased by 6 percent during the first week that individuals received the stimulus rebates and by 3, 5 percent in.