What is the difference between monetary policy and fiscal policy?

Monetary policy is primarily concerned with the management of interest rates and the total supply of money in circulation and is generally carried out by central banks such as the U.S. Federal Reserve. Fiscal policy is the collective term for the taxing and spending actions of governments. read more

Another crucial difference between the two is that fiscal policy can be targeted, while monetary policy is more of a blunt tool in terms of expanding and contracting the money supply to influence inflation and growth. Learn more about how the economy is controlled with A Look at Fiscal and Monetary Policy. read more

Key Differences Between Fiscal Policy and Monetary Policy. The following are the major differences between fiscal policy and monetary policy. The policy of the government in which it utilises its tax revenue and expenditure policy to influence the aggregate demand and supply for products and services the economy is known as Fiscal Policy. read more

Contractionary fiscal policy is the opposite - when the government raises taxes or lowers government spending. read more