Question

Is monetary policy or fiscal policy more important in achieving the U.S. national policy objectives?

Is monetary policy or fiscal policy more important in achieving the U.S. national policy objectives?

Homework Answers

Answer #1

Monetary policy will always be more important in achieving United States national policy objectives because monetary policy has a macro effect because it is related to change in the overall direction of the economy and fiscal policy is just limited to changes in the internal structure by affecting the taxes.

Monetary policy has a wide coverage as it covers interest rates and the Reserve requirements of the bank and it is required to maintain the money flow into the economy to achieve the United States national policy objectives but the fiscal policy is just limited to changes in the tax structure which will lead to surplus or deficit in hands of the people but the changes in monetary policy will have a long term impact.

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