1. Different Concepts
Monetary policy is a means formulated and implemented by financial authorities to influence macroeconomic operations through money supply, interest rates or other intermediary goals.
Fiscal policy is the guiding principles and measures to adjust the relationship between fiscal revenue and expenditure in order to achieve the expected economic and social development goals.
2. Different Tools Are Used
The tools used in monetary policy include open market operations, adjustment of interest rate levels, and adjustment of deposit reserve ratio. In the process of economic regulation, the government often combines monetary policy and fiscal policy to carry out “counter-economic cycle” regulation.
The tools used in fiscal policy include expanding or reducing fiscal expenditure, reducing or increasing taxes, etc.
3. The Maker Is Different
Monetary policy is set by the Central Bank of this country;
Fiscal policy is usually set by the central government.
4. The Content Is Different
Monetary policy is related to interest rates and credit. Fiscal policy is related to fiscal revenue and expenditure.
Definition of Monetary Policy:
Monetary policy refers to the general term for the basic guidelines and corresponding measures for adjusting the money supply formulated by a country’s government to achieve certain macroeconomic goals. It is one of the most important economic policies of the country. A country’s monetary policy is formulated by the country’s central bank, which is the core of the central bank’s realization of its functions.