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What is the comparison between Fiscal Policy and Monetary Policy?

What is the comparison between Fiscal Policy and Monetary Policy?

Answers

Wilfred
- Both aim at regulating the level of aggregate demand for domestic goods and services or the output of the economy.

- Fiscal policy is formulated and enforced by the government directly. While monetary policy is formulated and enforced by the Central Bank. However, there is nowhere in the world where the Central Bank is thoroughly independent of the government. It functions under the governor, in Kenya under the Ministry of Finance.

- Fiscal policy is government revenue, expenditure and debt management with a view to have a direct impact on the economy i.e. so as to manage the allocation of resources and the flow of funds in order to affect the level of income, prices, employment and output. Monetary policy on the other hand is government policy in relation to money supply to achieve the same policies as those of taxation.

Wilfykil answered the question on March 8, 2019 at 13:11

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