Hey! Do you know the difference between Monetary and Fiscal Policy!?
It's your lucky day! The main difference between monetary and fiscal is monetary involves changing interest rates and money supply. Fiscal supply has the government change tax rates and levels of government spending. Lets go for a walk, there is more to the economy than you know!
There's more! Recently, our government has made critical decisions because of COVID-19 such as a shelter in place order which caused most businesses to close. This means the economy will most likely begin to decline from it's previous state.
Oh! I did not know a few decisions would make that big of an impact.
In Texas, the economy is so rich because of oil and natural gas production, and the outstanding amounts of jobs we have to offer.
So what about our economy in Texas? What is it like?
The Fed takes actions regarding federal funds rates. Recently the inflation rate has been below target levels. The Fed then lowered the target range so the standard could be met.
What about the Fed? How are they tied into all this?
Okay! Since the Fed lowered the target rates, the states, including Texas, will maintain their rates.
After a long day of traveling, we drew up the conclusion that...
Both fiscal and monetary policies are used to raise the economy. By using one policy, it will not bring down the other.