What Is the Difference Between Fiscal Policy and Monetary Policy

question 120

Multiple Choice

What is the difference between fiscal policy and monetary policy?  

• A) Fiscal policy is macroeconomic policy, and monetary policy is microeconomic policy. 
• B) Monetary policy is macroeconomic policy, and fiscal policy is microeconomic policy. 
• C) Fiscal policy involves regulation of natural monopolies, and monetary policy involves the provision of public goods. 
• D) Monetary policy involves regulation of the money supply, and fiscal policy involves government spending and taxing.

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Definitions:

Cost of Equity

The return that shareholders require for investing in a company's equity, serving as a measure of the risk involved.

Preferred Stock

Stock with dividend priority over common stock, normally with a fixed dividend rate, often without voting rights.

Common Stock Dividends

Dividends that are paid to holders of a company's common stock, often from the company's profits.

Dividend Increases

An action by a company to increase the amount of dividends paid out to shareholders, usually as a result of increased profitability.