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What Is Monetary Policy vs. Fiscal Policy?
Monetary policy is enacted by a central bank with the mandate to keep the economy on an even keel. The aim is to keep unemployment low, protect the value of the currency, and maintain economic growth at a steady pace. It achieves this mostly by manipulating interest rates, which in turn raises or lowers borrowing, spending, and savings rates.
Fiscal policy is enacted by a national government. It involves spending taxpayer dollars in order to spur economic recovery. It sends money, directly or indirectly, to increase spending and turbo-charge growth.
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