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The Bank of England is responsible for the management of monetary policy which it uses to control inflation and economic development. It implements the policy by influencing money supply and using interest rates. Conversely, fiscal policy control activities in the economy through government spending and taxation and also controls the levels of national borrowing (Dosi et al., 2015). Monetary and fiscal policy focus on reducing the level of inflation, strengthening economic development and growth, reducing unemployment, preventing deficits in payment account and maintain sustainable public finance. The monetary policy control interest rates. In that, if inflation is predicted to rise above the targeted level, the bank increase interest rates. Increased interest rates lead to decreased demand and hinder the economy from expanding too fast.
The monetary and fiscal policies can be used to increase the production capacity of the economy and hence increasing the real national output or income. The government may therefore increase the unemployment benefits that are available to those that have been laid off due to COVID 19. Those that still have jobs and their aggregate demand and consumption have been affected by the lockdown constraints may be offered tax benefits to increase their disposable incomes. This effort will increase the amount of income available to