What is monetary policy and fiscal policy PPT?

MONETARY and FISCAL POLICY– PPT. 1. MONETARY POLICY Monetary policy refers to the use of instruments under the control of the central bank (RBI) to regulate the availability, cost and use of money and credit.

What is difference between monetary and fiscal policy PDF?

Monetary policy refers to the actions of central banks to achieve macroeconomic policy objectives such as price stability, full employment, and stable economic growth. Fiscal policy refers to the tax and spending policies of the federal government.

What is fiscal vs monetary policy?

Monetary policy addresses interest rates and the supply of money in circulation, and it is generally managed by a central bank. Fiscal policy addresses taxation and government spending, and it is generally determined by government legislation.

What is monetary policy and fiscal policy in India?

Monetary policies are formed and managed by the central banks of a country and such a policy is concerned with the management of money supply and interest rates in an economy. Fiscal policy is related to the way a government is managing the aspects of spending and taxation.

What is the role of monetary policy?

The monetary policy plays key role in the development of underdeveloped countries by controlling price fluctuations and general economic activities. This is done by making proper adjustment between demand for money and the supply of money. As the economy develops, there is continuous increase in demand for money.

Who controls monetary and fiscal policy?

The short answer is that Congress and the administration conduct fiscal policy, while the Fed conducts monetary policy. Both types of policy can have a significant effect on our everyday lives, but the lines between them can seem blurry to the average consumer.

Which is an example of monetary policy?

Some monetary policy examples include buying or selling government securities through open market operations, changing the discount rate offered to member banks or altering the reserve requirement of how much money banks must have on hand that’s not already spoken for through loans.

Who controls fiscal and monetary policy?

What are the basic components of monetary policy?

INSTRUMENTS OF MONETARY POLICY BANK RATE CASH RESERVE RATIO (CRR) STATUTORY LIQUIDITY RATIO (SLR) REPO RATE & RESERVE REPO RATE OPEN MARKET OPERATIONS 4. BANK RATE • Bank Rate is also known as discount rate.

What are the objectives of fiscal policy?

It is an instrument for promoting economic growth, employment, social welfare etc. Fiscal policy means any decision to change the level, composition or timing of government or to change the rate and structure of tax. The objectives of fiscal policy is same as of monetary policy.

What do you mean by monetary policy?

MONETARY POLICY Monetary policy refers to the use of instruments under the control of the central bank (RBI) to regulate the availability, cost and use of money and credit.

What is monetary policy according to Johnson?

According to Johnson, “Monetary policy is defined as policy employing central bank’s control of the supply of money as an instrument for achieving the objectives of general economic policy.” 2. OBJECTIVES OF MONETARY POLICY Full Employment Price Stability Economic Growth Balance of Payments