{"id":62029,"date":"2020-09-16T16:18:00","date_gmt":"2020-09-16T10:48:00","guid":{"rendered":"https:\/\/www.oliveboard.in\/blog\/?p=62029"},"modified":"2020-09-29T16:07:46","modified_gmt":"2020-09-29T10:37:46","slug":"monetary-policy-vs-fiscal-policy-know-the-difference-here","status":"publish","type":"post","link":"https:\/\/www.oliveboard.in\/blog\/monetary-policy-vs-fiscal-policy-know-the-difference-here\/","title":{"rendered":"Monetary Policy vs Fiscal Policy – Know the Difference Here"},"content":{"rendered":"

We often tend to get confused while referring to both of these terms: Monetary Policy and Fiscal Policy. While the former refers to the actions undertaken by a nation’s central bank to control the money supply to achieve macroeconomic goals that promote sustainable economic growth<\/strong>,\u00a0while the latter refers to the use of\u00a0government spending\u00a0and tax\u00a0policies<\/strong> to influence economic conditions, especially macroeconomic conditions, including aggregate demand for goods and services, employment, inflation, and economic growth. Let us now understand the basic differences in a tabular form here in this blog of Monetary Policy vs Fiscal Policy. Let us get started.\u00a0<\/span><\/p>\n

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Monetary Policy vs Fiscal Policy<\/strong><\/span><\/h2>\n\n\n\n<\/colgroup>\n\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n
Sr. No.\u00a0\u00a0\u00a0<\/span><\/th>\nMonetary Policy\u00a0\u00a0\u00a0<\/span><\/th>\nFiscal Policy\u00a0\u00a0\u00a0<\/span><\/th>\n<\/tr>\n<\/thead>\n
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\n1\u00a0 \u00a0<\/span><\/strong><\/td>\n		The monetary policy addresses interest <\/span>rates and the supply of money in <\/span>circulation, and it is generally <\/span>managed by a central bank.<\/span><\/td>\nThe fiscal policy addresses taxation and government spending, and it is generally determined by government legislation.<\/span><\/td>\n<\/tr>\n
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\n2\u00a0 \u00a0\u00a0<\/span><\/strong><\/td>\n		Monetary Policy is announced by the monetary authority of the country (Central Bank).\u00a0\u00a0\u00a0<\/span><\/td>\nFiscal policy is announced by the Ministry of Finance.<\/span>
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\n \u00a0\u00a0\u00a0<\/span><\/td>\n<\/tr>\n
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\n3\u00a0 <\/strong>\u00a0<\/span><\/td>\n		Monetary policy is more of a blunt tool in terms of expanding and contracting the money supply to influence inflation and growth and it has less impact on the real economy. \u00a0\u00a0\u00a0<\/span><\/td>\nThe fiscal policy generally has a greater impact on consumers than monetary policy, as it can lead to increased employment and income.\u00a0\u00a0\u00a0<\/span><\/td>\n<\/tr>\n
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\n4\u00a0 \u00a0<\/strong>\u00a0<\/span><\/td>\n		The monetary policy seeks to spark economic activity.\u00a0\u00a0\u00a0<\/span><\/td>\nThe fiscal policy seeks to address either total spending, the total composition of spending, or both.\u00a0\u00a0\u00a0<\/span><\/td>\n<\/tr>\n
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\n5 <\/strong>\u00a0\u00a0<\/span><\/td>\n		Expansionary monetary policy can have limited effects on growth by increasing asset prices and lowering the costs of borrowing, making companies more profitable.\u00a0\u00a0\u00a0<\/span><\/td>\nIf the economy is near full capacity, expansionary fiscal policy risks sparking inflation. \u00a0\u00a0\u00a0<\/span><\/td>\n<\/tr>\n
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\n6<\/strong>\u00a0 \u00a0\u00a0<\/span><\/td>\n		Monetary policy can boost consumer spending through lower interest rates that make borrowing cheaper on everything from credit cards to mortgages.\u00a0\u00a0\u00a0<\/span><\/td>\nFiscal policy involves tax and spending decisions set by the government and will impact individuals’ tax bills or provide them with employment from government projects.\u00a0\u00a0\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\"Monetary<\/p>\n

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