Fiscal policy†’ Spending and taxation
Monetary Policy†’ printing and circulation of money / interest rates
These are two major tools for governments to use in interfering with domestic policy
On “These are two major tools for governments to use in interfering with domestic policy”; in fact these are two major tools for interfering with the domestic economy.
Also, there is no such thing as free lunch with either of these policies: with a fiscal policy, the government runs the risk of choking economic growth with high taxation, and with a monetary policy, the printing of excess money can lead to crippling inflation rates (a good example of this is post-World War I Germany’s period of hyperinflation).
^ Great! Again, I am looking for clues that you understand these terms. The post #4, for example, can show me that you know what you’re talking about.
These are two major tools used by governments to interfere with the domestic economy. Fiscal policy refers to public spending and taxation while monetary policy is used to control inflation by setting the amount of money in circulation and the level of interest rates.
For example in the European Union, the member states have individual fiscal policies but many of them have a common monetary policy because they share the Euro currency.
Question: Shall we develop more on the examples, or just a mention is enough?
Fiscal policy†’ Spending and taxation
Monetary Policy†’ printing and circulation of money / interest rates
These are two major tools for governments to use in interfering with domestic policy
On “These are two major tools for governments to use in interfering with domestic policy”; in fact these are two major tools for interfering with the domestic economy.
Also, there is no such thing as free lunch with either of these policies: with a fiscal policy, the government runs the risk of choking economic growth with high taxation, and with a monetary policy, the printing of excess money can lead to crippling inflation rates (a good example of this is post-World War I Germany’s period of hyperinflation).
^ Great! Again, I am looking for clues that you understand these terms. The post #4, for example, can show me that you know what you’re talking about.
These are two major tools used by governments to interfere with the domestic economy. Fiscal policy refers to public spending and taxation while monetary policy is used to control inflation by setting the amount of money in circulation and the level of interest rates.
For example in the European Union, the member states have individual fiscal policies but many of them have a common monetary policy because they share the Euro currency.
Question: Shall we develop more on the examples, or just a mention is enough?
Answer: for an ID, this is perfectly fine. – BK