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:

Product

An item or service created through a process and offered to a market to satisfy a want or need.

Joint Venture

A joint venture is a strategic alliance where two or more parties, usually businesses, form a partnership to share markets, intellectual property, assets, knowledge, and profits.

Contractual Arrangement

An agreement between two or more parties that creates enforceable obligations and rights for each party, often documented legally.

Foreign Firm

A company that is based, incorporated, or originates in a country different from the market it operates in or sells its products to.