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Monetary And Fiscal Policy
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The Monetary and Fiscal Policies, although controlled by two different organizations, are the ways that our economy is kept under control. Both policies have their strengths and weaknesses, some situations favoring use of both policies, but most of the time, only one is necessary.
The monetary policy is the act of regulating the money supply by th ....
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.... banks. Because it is easier to make gradual changes in the supply of money, open market operations are use more regularly than monetary policy.
When member banks want to raise money, they can borrow from Federal Reserve Banks. Just like other loans, there is an interest rate, or a discount rate, the third tool of the monetary policy. If the discou.... |
| Word count: 925 |
Page count: 4 |
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