Monetary policy australia essay
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Monetary policy Essays
Essay on Monetary Policy | Cram
Monetary policy and fiscal policy refer to the two most widely recognized tools used to influence a nation's economic activity. Monetary policy is primarily concerned with the management of interest rates and the total supply of money in circulation and is generally carried out by central banks , such as the U. Federal Reserve. In the United States, the national fiscal policy is determined by the executive and legislative branches of the government. Central banks typically have used monetary policy to either stimulate an economy or to check its growth. By incentivizing individuals and businesses to borrow and spend, the monetary policy aims to spur economic activity.
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Monetary Policy Outlook : Australia
Question: Discuss the implication of business cycles on fiscal and monetary policy. Answer: Business Cycle: Market economies have regular fluctuations in the level of economic activity which we call the business cycle. In other words, the business cycle is the periodic but irregular up-and-down movements in economic activity, measured by fluctuations in real GDP and other macroeconomic variables. A business cycle is identified as a sequence of four phases: 1. Contraction A slowdown in the pace
It is responsible for the management of all the economic activities in-country. The government employs two important implements in realizing these objectives: a fiscal policy, that determines how much tax should be done on industries, individuals, or any other businesses in the country. It is also used to set and check on the appropriate spending levels of the country; monetary policy finds its applicability in the supply of money within the nation.
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