Monetary vs. Fiscal policy

Monetary vs. Fiscal policy
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  • Payton McCarroll and Emma Liesse
  • Today, we are going to be learning about the current economic conditions and their impact on the Texas economy!
  • Fiscal policy is controlled by the government,and its two tools are spending and taxes
  • While monetary is controlled by the Federal Reserve, and its 3 tools are discount rate, RRR, and open market.
  • The recent government actions impact the economy by increasing the spending, and decreasing taxes, both resulting in an increase in prices.
  • The Texas economy is going well, manufacturing and retail are going up, the housing market is slowing down and we are having labor shortages.
  • The Feds actions involve economic activity goes up, unemployment goes down, and inflation goes up. Resulting in the federal funds rate to go up, helping the Texas economy.
  • In the end, the fiscal and monetary policies do contradict each other because the government is expanding the money supply, but the Feds are trying to limit the money supply. 
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