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Monetary And Fiscal Policy
Beginning of essay
The Monetary and Fiscal Policies, although controlled by two
different organizations, are the ways that our economy is kept under
control. Both policies have their strengths and weaknesses, some
situations favoring use of both policies, but most of the time, only
one is necessary. ....
Middle of essay
....gradual
changes in the supply of money, open market operations are use
more regularly than monetary policy.
When member banks want to raise money, they can borrow from
Federal Reserve Banks. Just like other loans, there is an interest
rate, or a discount rate, the third tool of the monetary policy. If
the discount rate is high, then fewer banks will be inclined to
borrow, and if it is low, more banks will (theoretically) borrow
from the re.... |
| Number of words: 925 |
Approximate pages: 4 |
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