What is a common goal of both fiscal and monetary policy?

A common goal of both fiscal and monetary policy is to stabilize economic activity. Both policies aim to manage the economy's overall performance, influencing factors such as employment, production, and inflation.

Fiscal policy, enacted by the government, refers to the use of government spending and taxation to influence the economy. For example, during a recession, an increase in government spending can stimulate demand, leading to higher levels of economic activity and employment.

Monetary policy, controlled by a country's central bank, involves managing the money supply and interest rates. By lowering interest rates, the central bank can encourage borrowing and investment, which also stimulates economic activity during downturns.

While both policies have different tools and mechanisms, they share the common objective of maintaining stable economic growth and minimizing fluctuations in the economy. This contrasts with other options. For instance, increasing inflation is often a side effect rather than an explicit goal, and reducing government regulations or promoting international trade might be desirable but are not direct aims of fiscal or monetary policy.