QUESTION 6
What is inflation? Briefly discuss the various Fiscal and
The term "monetary policy" refers to actions taken by the central bank with the intention of influencing the amount of credit and money in an economy. Fiscal policy, on the other hand, refers to the choices made by the government regarding taxation and spending. Fiscal and monetary policies are both used to control economic activity over time. Government spending and taxation are changed as a result of fiscal policy, which affects overall demand. These factors have an impact on household employment and income, which in turn has an impact on consumer spending and investment. Monetary policy has an impact on the amount of money in an economy, which in turn has an impact on interest rates and inflation.
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