fiscal policy refers to the federal government is use of it is annual budget (usually 'handed down' in May each year) to affect the level of economic activity , resource allocation and income distribution. The budget strategy can also influence the achievement of the government is objectives of internal and external balance and economic growth two. The two main instruments of fiscal policy are government spending and taxation. Changes in the level and composition of taxation and government spending can impact on the following variables in the economy. - Aggregate dermand and the level of economic activity - The pettern of resource allocation , and - The distribution of incomeMonetary policy is the process by which the government, central bank or monertary authority manages the supply of money or tradng in foreign exchange markets. Monetary theory provides insight into how to craft optimal monetary policy.Monetary policy is gemerally referred to as either being an expansionary policy or a contractionary policy , where an expansionary policy increases the total supply of money in the economy and a contractionary policy decreases the total money supply. Expamsionary policy is traditionally used to combat unemployment in a recession by lowering interest rates , while contractionary policy has the goal of raising interest rates to combat inflation (or cool an otherwise overheated economy) . Monetary policy should be contrasted with fiscal policy, which refers govenment borrwing , spending and taxation.
đang được dịch, vui lòng đợi..