Monetary v. fiscal

Monetary v. fiscal
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  • What is Texas economy like right now?
  • However, we are having labor shortage and flat house sales. Therefore, we are starting to get inflation
  • Our economy is alright; the retail and manufacturing is good
  • What are the Feds doing with the federal fun rates then?    
  • Well, to control inflation, the feds will have to increase federal funds rates which will help the Texas economy!
  • Now can you guys tell me the difference in between fiscal and monetary policy?
  • Fiscal policies are controlled by the government and there main tools are spending and rates
  • But  how exactly does the government's action leave an impact of the economy of the U.S. as a whole?
  • Monetary are controlled by the feds and their specialties are bonds, RRR and discount rates
  • Well, since gov't spending is going up and the new tax codes are leaving people with more money, the price market will also rise. This is good for the economy but we are too, starting to get inflation.
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