What is the difference between fiscal and monetary policies? Please discuss in detail.

Expert Solution

Meaning of fiscal policy

Fiscal policy refers to the policy by which the government's adjusted the level of expenditures and rates of tax just to keep an eye on the economy of the country.

Meaning of monetary policy

It is the policy of the macroeconomic which is set down by the central government. It involves the aggregate management of the supply of money etc . just to obtain the objective of the macroeconomics be like growth, inflation etc.

Difference between the fiscal and monetary policy is -

Fiscal policy is the one which is set by the government and on the other hand monetary policy is set by the central bank.

Fiscal policy has no determined goal but the monetary policy always target inflation.

We can consider the spendings of government and taxes are tools of fiscal policy and on another side rate of interest are the tools of monetary polipolicy .

can consider the fiscal policy as more political because officials are elected and monetary policy are less political because the governor is appointed.

Rahul Sunny answered 2 years ago

Please explain the difference between monetary policy and fiscal policy AS detail as possible Thanks

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