What is the difference between Fiscal and Monetary policy? - ProProfs Discuss
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What is the difference between Fiscal and Monetary policy?

Asked by S. Barnes, Last updated: Feb 17, 2020

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J. Emmerich

J. Emmerich, Web Content Writer, New York City

Answered Sep 06, 2019

Monetary policy refers to the changing of the different interest rates and influencing the current supply of the government. Fiscal policy will refer to change that may be done by the government so that the tax rates can be changed accordingly. The monetary policy is usually handled by the central bank or those who are involved in money.

They may sometimes become affected whenever there is inflation. Even the recession will affect this greatly. Fiscal policy is known to be handled by the government. There are some changes that may be done with how the government is going to spend the money and what will be spent on. The levels of taxation are also under fiscal policy.

 

W. Pratt

Want to learn new things and share my knowledge

W. Pratt, Marketing Analyst, MBA, Lincoln

Answered Aug 27, 2019

When you deal with money, you may hear a large number of words associated with money. These could be monetary, fiscal, and financial, to name a few. However, if you are into investing and investments, then you may have heard both monetary policies as well as fiscal policies. These are different terms that have different meanings.

Fiscal policies deal with taxing and the spending that the government does. The government deals with fiscal policies. Monetary policies, on the other hand, has to do with interest rates and the money that is in circulation. A significant central bank handles monetary policies. Both of these things affect the government and the economy, which in turn affects people and the citizens in the country.

 

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