Fiscal policy and Monetary policy - definition and difference
|What is the difference between fiscal policy and monetary policy of a country ? Do both of them depend on the government decisions ?|
|To get the required effect on economy, both fiscal policy and monetary policy may be applied in coordination with each other.|
Fiscal policy - is the use of government spending and tax policies, to influence a country's economy. It relies mostly on taxation, government spending and borrowing.
Monetary policy - is made by a central bank or related agency. It is based on the control of interest rate and money supply. Monetary policy is referred to as being either expansionary or contractionary.
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