Government 's Tool Box Is Monetary And Fiscal Policy Essay

1677 Words Dec 10th, 2015 null Page
The two most powerful tools in our government’s tool box is monetary and fiscal policy. Monetary policy and fiscal policy influence our economy significantly. Monetary policy is the government policy that adjusts the stock money to control inflation, increase economic growth, and promote the true purpose of the national economy. It deals with the management of interest rates and total supply of money in circulation , that is generally carried out by the central banks ,like the Federal Reserve. The theory behind the monetary policy is incentivizing individuals and businesses to borrow and spend. Given in the textbook, fiscal policy is another governmental policy which deals with the concerns of raising revenues and another governmental policy which deal with the concerns of revenues and authorizing expenditures for specific purposes. It affects the overall level of a demand as whole. Fiscal policy is the term for taxing and spending actions by the government. Fiscal policy targets the total level of spending of the government, the total composition of spending, or both in our nation’s economy. I think it would make more sense for the United States to emphasize today a monetary policy when crafting a macroeconomic policy because the theory behind monetary policy is that the government controls the money. With monetary policy, the government is able to control how much or how little money will be circulating by the amount they print. If more money is…

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