Fiscal and Monetary Policy Essay Example | Topics and Well Written Essays - 1250 words

Fiscal and M integritytary Policy - Essay ExampleFrom the study it is clear thatin the United States, moreover, the existing authority to the Federal Reserve Board emanating from Congress is for the former to promulgate fiscal policy decisions that will push employment numbers to the maximum as wholesome as achieve stability in prices of goods and services.As the paper highlightsseparate from this general two-component mandate, however, the US Central Bank has autonomy with regard to the operational aspects of achieving those mandates, and that means that the US Federal Reserve Board has the independence to chart financial policy without intervention from the US Congress. In contrast, when one talks about fiscal policy, one talks about things that relate to the way government raises revenues through taxation, in order to finance its activities in terms of government expenditures.As the name implies monetary policy refers to the policy, as controlled bank, pertaining to the amount of money in circulation in the economy. The mechanisms of control of the monetary supply, or the effecting of monetary policy include tweaking interest rates for loans, as well as tweaking monetary reserve requirements for banks. The end result is that the central bank can calibrate the amount of money n circulation by exacting these monetary policy levers.In times of recession, mostly, the central bank will try to lower interest rates to spur borrowing and also slacken controls on money to increase the overall supply of money in the economy.