Identify each of the following policies as either fiscal policy or monetary policy and explain why.
a) The cash for clunkers program which provided a tax credit for purchasing a new vehicle.
b) The FDIC insured amount for bank accounts is increased to $250,000 and bank reserves are paid interest.
c) New construction projects on highways and roads paid for as part of the recovery act.
For ONE policy, explain the intended effect on the economy using the AS-AD model.