Monetary Vs. Fiscal Policy: Jaydon Furtick and TJ Brakel
What in the world is monetary and fiscal policy?
Lucky for you, I know the difference!
Monetary policy involves the banks and changing interest rates to effect the money supply.
Unlike monetary, fiscal policy involves the government and changing its spending habits.
What about fiscal policy?
Lets take a trip to the Texas state capital to really see how these policies really work.
Not Texas... it's hot over there!
With the coronavirus coming into action, the Texas economy is at a slight decline and are heading into a recession. Due to this, the banks are most likely to enact a monetary policy to decrease interest rates to assist the economy. The government will put a fiscal policy into play that cuts down government spending. Overall this will help and assist the economy.
Oh I think I get it now!
Whether it be monetary or fiscal, some polices might contradict another simply because the government and the banks are two separate entities and they might not be on the same page.
Thank you for the unexpected lesson sir! I'm going to head back home now.