How does the government attempt to affect the economy with the fiscal and monetary policy?

The government attempts to fix the economy fiscally in two different ways. The government will increase taxes because they think that they can allocate resources more effectively if the money is in their hands. In contrast, the government will decrease taxes because they think individuals will allocate the resources better. The Federal Reserve, which pretty much controls monetary policy in the United States, will attempt to use monetary policy to stabilize the economy through the supply of money, the availability of money, and the interest of obtaining money.