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POLICY IN THE UNITED STATES(FISCAL POLICY AND MONETARY POLICY) - Essay Example

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In fiscal policy, the president and the American congress aim at increasing price steadiness, elevated employment and maximize the growth of economy through legislating in a way that they increase the flow of money through the economy by regulating its spending and controlling…
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POLICY IN THE UNITED STATES(FISCAL POLICY AND MONETARY POLICY)
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POLICY IN THE UNITED STATES(FISCAL POLICY AND MONETARY POLICY)

Download file to see previous pages... The most open similarity between the two policies is that both work together concurrently to control the rate of employment, currency value stabilization and work towards the realization of economic stability in the states. They both optimize economic growth in the states by controlling the flow of currency in the market. When government expenditure is high through the effect of fiscal policy and the economy goes down due to inflation, the Fed, through monetary policy intervenes to reduce inflation and maximize economy growth (Beetsma 327).
The government is the prime body that deals with and regulates the entire economy of its states. The congress therefore makes decisions on which strategy to apply and when appropriate. This mandate of the government over both policies is a major similarity since the government has the mandate to choose between the fiscal policy and the monetary policy whenever any of the two needs to be inculcated to realize economic stability. Both the policies are effective in their own ways.
The monetary policy is oversees and inculcated by the Fed and effects on the slowing down of the growth in the economy of the states. That means the government does involve itself in the realization of this policy. However, the fiscal policy is overseen by the government and is utilized in the boosting of economic growth and stability (Beetsma 256).
The fiscal policy is more influential since it aims at controlling the rate of government expenditure and escalating the flow of money in the economy. It involves government spending and trimmi9ng of taxes, both of which are politically appealing and highly supported as disputed to the momentary policy which does not increase spending but reduces the effective spending by the federal government.
The fed has the highest influence and greatest ability in the influence towards slowing economic augmentation and leading to ...Download file to see next pagesRead More
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