Suppose the economy is initially at labour market equilibrium with stable prices (inflation is zero). Suddenly, the pandemic (COVID-19) started, and economies went into recession. The government intervened by using Fiscal policy (FP) and Monetary policy (MP) to stabilise the economy.
Show by diagram how a government and central bank could help to stabilise the economy and discuss each policy's impact on the economy. (25 marks)
Please answer this on context of the world, not the US or any other country.