i have always wanted to know more about Fiscal and Monetary policy, i know that fiscal is controlled by the government, and monetery by the fed.
this is also why, when the interest rate of loans go up, there will be a less amount, because the policy would have changed to were people cannot pay off loans.
The feds control the three tools of monetary policy, the discount rate, the OMO, and the reserve ratio. these three determine the state of monetary policy.
On the other hand, the government has control of the fiscal policies state. By either adjusting taxes or spending, they effect fiscal policy.