Fiscal Policy And Monetary Policy

1735 WordsSep 21, 20157 Pages
We the government have to find a better way to spend the economic money better to improve our situation. Looking at the two expansionary which is fiscal and monetary policy to find out a way to find the economic. It is macroeconomic policy that pursues to enlarge the money supply to boost economic growth or combat inflation. One of the form is fiscal policy of expansionary policy, which comes in the method of tax cuts, discounts and increased government spending. Expansionary policies do come from central banks, which focus on cumulative the money supply in the economy. Now let look at the break down of expansionary policy which deal with the fiscal policy and monetary policy. The U.S. Federal Reserve pays expansionary policies whenever it drops the target fed funds rate or rebate rate or when the U.S. Federal Reserve purchases Treasury bonds on the open market, thereby inserting capital straight into the economy. Expansionary Policy is a valuable tool for handling low-growth periods in the industry cycle, but it also comes with a lot jeopardies. Always economists need to know when to enlarge the money supply to escape causing side effects like high inflation. There is also a period pause concerning when a policy move is made to development so it can works its way through the economy. This makes up-to-date breakdown nearly intolerable, even for the most experienced economists. Finally, sensible central bankers and legislators need to know when to standstill money supply

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