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

Solutions

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 1 year ago

Next > < Previous

Related Solutions

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

Briefly describe the difference between Fiscal & Monetary policies. Next identify at least one fiscal and...

Briefly describe the difference between Fiscal & Monetary policies. Next identify at least one fiscal and one monetary policy that was instituted in March 2020 in response to the COVID-19 crisis to help with economic recovery. Using the AD-AS model, explain how these policies were expected to work.

What is the difference between monetary and fiscal policy?

Describe the differences between fiscal policy and monetary policy. What fiscal and monetary policies might be...

Describe the differences between fiscal policy and monetary policy. What fiscal and monetary policies might be prescribed for an economy in a deep recession? Be sure to distinguish between the monetary and fiscal policy solutions in your answer.

Discuss the tradeoffs between stability & growth presented by the use of fiscal & monetary policies....

Discuss the tradeoffs between stability & growth presented by the use of fiscal & monetary policies. Discuss arguments in favor of & opposed to the use of discretionary policy to manage the business cycle. Provide at least one example of each.

Explain the difference between fiscal and monetary policy. Who makes each of these policies? Explain. Also,...

Explain the difference between fiscal and monetary policy. Who makes each of these policies? Explain. Also, explain any 2 (two) steps that can be taken to increase the supply of money in circulation by using monetary policy.

What is the difference between fiscal and monetary policy? Give examples of each.

What are the distinctions between monetary policy and fiscal policy? How does each of these policies...

What are the distinctions between monetary policy and fiscal policy? How does each of these policies affect your professional and personal lives?

A) What are two major differences between fiscal and monetary policies? B) What is he FED’s...

A) What are two major differences between fiscal and monetary policies? B) What is he FED’s inflation target? C) What is the LOLR function of the FED? D) What would you recommend for the government to do today during the COVID crisis? How will this help the economy?

Distinguish between ‘fiscal’ and ‘monetary’. That is, what are fiscal activities and what are monetary activities?...

Distinguish between ‘fiscal’ and ‘monetary’. That is, what are fiscal activities and what are monetary activities? How are they separate things, and how are they interrelated? (Hint: The Federal Government does fiscal activity, while the Federal Reserve controls monetary activity.) The equation of exchange, MV = PQ, may be used to answer this question.

Subjects