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On your readings and video resources you’ve heard that monetary policy is the policy that impacts the supply of money in the economy. You’ve also been exposed to fiscal policy which is the policy that impacts government spending, taxation, and borrowing. In this assignment you will be asked to compare and contrast monetary and fiscal policy. Use the Library to research fiscal and monetary policy and write a two- to three-page paper addressing the following:
Monetary Policy
– Explain the Federal Reserve System and how it influences monetary policy.
– What is a central bank?
– What are the three traditional tools used to affect the money supply? Provide examples to support your answers.
Fiscal Policy
In your own words, what is fiscal policy?
– What are the concepts of government spending, taxation, and borrowing? Provide an example of fiscal policy in each of the three areas.
Comparison
When you compare monetary policy to fiscal policy, which process is quicker to create an impact? Why? Provide an example to support your answer.
How have you personally been impacted by either monetary policies or fiscal policies? This could be in your personal life or professional life. Provide details to support your answer.
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