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fiscal vs monetary policy

Compares and contrasts fiscal and monetary policy
by

Lyndsey Coppedge

on 23 March 2011

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Transcript of fiscal vs monetary policy

Fiscal vs Monetary Policy Adherents of monetarism believe that the money supply is the most important factor in macroeconomic performance Fiscal policy is the use of government spending and revenue collection to influence the economy. Expansionary tools include:
Increasing government spending
Cutting taxes Contractrionary tools include:
Decreasing government spending
Raising taxes
Monetary policy is the actions the Federal reserve takes to
influence the level of real GDP and the rate of inflation in the
economy. Expansionary tools include:
Open market operations: bond purchases
Decreasing the discount rate
Decreasing reserve requirements
Contractionary tools include:
Open market operations: bond sales
Increasing the discount rate
Increasing reserve requirements Pink speaks out
against President Bush's
Fiscal Policy. She includes
the No Child Left Behind Act
of 2001 in her song. The Federal Reserve unexpectedly
decreased the discount rate, which intern
made it better for the people as a whole.
They reduced the rate from 0.5 percent
to 5.75 percent, which created a stabilized rate
target of 5.25 percent.
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