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, family income, corporate profits and inflation decrease, while at the same time unemployment and bankruptcies increase. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Monetary 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 low unemployment. Monetary policy is maintained through 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 in order 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 defaults 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 collapse. Furthermore, it was exceptionally easier to obtain credit from 2002 to 2008, which led to high-risk lending and borrowing practices. The recession began in the United States, but the effects eventually were felt around the world, making 2008 the worst global recession since World War II. The Federal Reserve, Securities and Exchange Commission, and Treasury acted quickly to implement policies in response to the economic crisis. (Kitromilidies, 2012) In 2008, the Economic Stimulus Law was passed with the aim of stimulating the economy through fiscal incentives and targeted public spending; the total cost of the bill was estimated at $152 billion. (Hopson, 2008). Targeted individual tax relief was given 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 a total discount of no more than $600 per person or $1,200 per married couple; A total of $100 billion in tax breaks were issued. The goal of the economic stimulus bill was to increase consumer spending through rebates and increase business spending through targeted tax incentives. (Hopson, 2008) Many economists were skeptical that the Economic Stimulus Act rebates would be spent quickly by consumers and instead suggested that the stimulus would be spent over a period of many years, while many consumers would choose to save during periods of slowdown, making this fiscal policy useless. A study conducted during the first wave of rebate checks showed that consumer spending on durable goods increased by 6% in the first week that individuals received the stimulus rebates and by 3.5% in subsequent weeks. (Broda, 2008) The stimulus rebate was most effective for low-income families, who were less likely to have money in an emergency savings fund; low-income families.