Explain the Difference Between Fiscal Policy and Monetary Policy

question 49

Essay

Explain the difference between fiscal policy and monetary policy. Discuss how each of these approaches can be used to influence the state of the economy.

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Definitions:

Round

In mathematics or financial contexts, to round means adjusting a number to a specified degree of precision, often to the nearest whole number or decimal place.

Current Ratio

Current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.

Payables

Financial obligations or amounts owed by a business to its creditors or suppliers for goods and services received.

Equity

The total value of a company's ownership interest by its shareholders, calculated as assets minus liabilities.