2. Fiscal Policy is carried out by the Ministry of Finance whereas the Monetary Policy is administered by the Central Bank of the country. 3. Fiscal Policy is made for a short duration, normally one year, while the Monetary Policy lasts longer. 4. Fiscal Policy gives direction to the economy. On the other hand, Monetary Policy brings price stability. 5. Fiscal Policy is concerned with government revenue and expenditure, but Monetary Policy is concerned with borrowing and financial arrangement. 6. The major instrument of fiscal policy is tax rates and government spending. Conversely, interest rates and credit ratios are the tools of Monetary Policy. 7. Political influence is there in fiscal policy. However, this is not in the case of monetary policy. Conclusion
The main reason of confusion and bewilderment between fiscal policy and monetary policy is that the aim of both the policies is same. The policies are formulated and implemented to bring stability and growth in the economy. The most significant difference between the two is that fiscal policy is made by the government of the respective country whereas the central bank creates the monetary policy.
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