Comparison Between Fiscal Policy And Keynesianism

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Fiscal and monetary police are two of the most powerful tools that impact a nation’s economic activity (Investopedia 1). Fiscal policy is defined as the government spending and taxation that influences the economy. Central banks use monetary policy to change the money supply and either stimulate faster growth of an economy, or slow it down due to risks such as inflation. Both policies have their share of similarities and differences, and are vital in the United States economy. It is still questioned which policy ends up being more effective long and short term (Schmidt 1).
Fiscal policy and Keynesianism are commonly linked. The term arose from British economist John Maynard Keynes who had an influence on theories about the way an economy functions
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Like fiscal policy, monetary policy is used to speed up or slow down the economy. Unlike the national fiscal policy which is determined by the Executive and Legislative Branches, monetary policy is controlled by central banks such as the Federal Reserve. It is presumed that monetary policy causes the economy to grow at unusually high speeds by encouraging businesses and consumers to borrow and spend (Investopedia 1). If spending is restricted and savings are incentivized, the economy will have slower growth than usual. Monetary policy is very similar to fiscal policy. Like fiscal policy, monetary policy is used to speed up or slow down the economy. Unlike the national fiscal policy which is determined by the Executive and Legislative Branches, monetary policy is controlled by central banks such as the Federal Reserve. It is presumed that monetary policy causes the economy to grow at unusually high speeds by encouraging businesses and consumers to borrow and spend (Investopedia 1). If spending is restricted and savings are incentivized, the economy will have slower growth than usual. Monetary policy is very similar to fiscal policy. Like fiscal policy, monetary policy is used to speed up or slow down the economy. Unlike the national fiscal policy which is determined by the Executive and Legislative Branches, monetary policy is controlled by central banks such as the Federal Reserve. It is presumed that monetary policy causes …show more content…
Like fiscal policy, monetary policy is used to speed up or slow down the economy. Unlike the national fiscal policy which is determined by the Executive and Legislative Branches, monetary policy is controlled by central banks such as the Federal Reserve. It is presumed that monetary policy causes the economy to grow at unusually high speeds by encouraging businesses and consumers to borrow and spend (Investopedia 1). If spending is restricted and savings are incentivized, the economy will have slower growth than

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