Fiscal policy and monetary policy both work by shifting aggregate demand, so the stance that matters is the combination, not either tool alone. In the short run that shift moves the economy along the Phillips curve: more demand means lower unemployment but higher inflation, less demand the reverse. The two tools differ in reach, speed and side effects, so governments mix them; a loose budget with tight money keeps spending programs going without overheating, but high interest rates attract capital and push the exchange rate up. In the long run unemployment drifts back to its natural rate and only inflation keeps the mark of the mix. This is the real knowscape from knowhere, not a picture of one. Drag it. Watch what actually changes.
Two levers: what the government spends, and what money costs. Everything else is timing and side effects.
The beam sits level — spending matches taxes, a balanced budget.
To boost the economy, you pile weight onto spending and the beam tilts.
Spending outweighs taxes: a deficit that keeps pushing demand up.
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