What do you understand by monetry and fiscal policy

Question

Accepted Answer

Monetary policy involves managing the money supply and interest rates to control inflation and promote economic growth. Fiscal policy involves government spending and taxation to influence the economy.

Monetary policy is controlled by central banks and involves adjusting interest rates, open market operations, and reserve requirements.
Fiscal policy is controlled by the government and involves decisions on spending, taxation, and borrowing.
Monetary policy aims to control inflation, promote economic growth, and stabilize currency values.
Fiscal policy aims to achieve economic stability, reduce unemployment, and stimulate economic growth.
Examples of monetary policy tools include lowering interest rates to encourage borrowing and spending, while examples of fiscal policy tools include increasing government spending on infrastructure projects.
Both monetary and fiscal policy are used to achieve macroeconomic objectives and influence the overall health of the economy.

What do you understand by monetry and fiscal policy

Popular interview questions of Portfolio Management Intern