Reference no: EM133150804

Fiscal vs. Monetary Policy

Question 1.

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

Collapse Sub discussion Brendah Lagat

Question 2.

Write reply for this article (Brendah)

Monetary policy refers to the actions of central banks to achieve macroeconomic policy objectives such as price stability, full employment, and stable economic growth.Examples include buying or selling government securities through market operations, changing the discount rate offered to member banks or altering the reserve requirement of how much money banks must have on hand that's not already spoken for through loans.

Fiscal policy refers to the tax and spending policies of the federal government and is determined by the executive and legislative branches of the government. Examples include tax cuts and increased government spending

Question 3.

Write reply for this article (Alan)

Fiscal policies refer to the policies related to taxation and government revenue. Fiscal policy is undertaken by the government. For example, if the government increases taxes by 5%, this would be an example of fiscal policy.

Monetary policy refers to the policies related to money supply and interest rates, which are taken by the central bank of a country. For example, if the US Federal Reserve (the central bank of USA) buys government securities to increase the money supply, this will be an example of monetary policy.

Question 4.

Write reply for this article (Carli)

Monetary policy are the activities by the central bank that influence the amount of money and credit that are in the economy.

Changing reserve requirements for a bank could be a monetary policy.

Fiscal policy is when the government makes decisions about taxation and spending.

An example of a fiscal policy could be a tax cut or increase.