Skip to main content
Back

Monetary vs Fiscal Policy definitions

Control buttons has been changed to "navigation" mode.
1/15
  • Monetary Policy
    Central bank tool adjusting interest rates and money supply to influence economic activity, acting quickly and without political bias.
  • Fiscal Policy
    Government strategy using taxes and spending to affect consumer behavior and stimulate demand, often involving political processes.
  • Central Bank
    Institution responsible for managing a nation's monetary policy, including setting interest rates and controlling money supply.
  • Interest Rate
    Cost of borrowing money, set by the central bank, which influences consumer spending and business investment.
  • Money Supply
    Total amount of currency and liquid assets available in an economy, managed by the central bank to impact economic conditions.
  • Government Spending
    Expenditures by policymakers on goods, services, and programs to stimulate economic activity and maintain employment.
  • Tax Break
    Reduction in taxes provided by policymakers, increasing disposable income and encouraging consumer purchases.
  • Disposable Income
    Money available to individuals after taxes, which determines their ability to spend and drive economic growth.
  • GDP
    Measure of total economic output, influenced by consumer spending, government actions, and monetary adjustments.
  • Unemployment
    Condition where individuals seeking work are unable to find jobs, affected by economic policies that stimulate demand.
  • Inflation
    General rise in prices across an economy, impacted by changes in money supply, interest rates, and government spending.
  • Economic Decline
    Period marked by reduced spending, lower output, and rising joblessness, prompting intervention through policy tools.
  • Political Neutrality
    Characteristic of actions taken without favoring any group or party, often associated with central bank decisions.
  • Market Equilibrium
    State where supply and demand are balanced, maintained through policy interventions during economic fluctuations.
  • Policymaker
    Elected official or government authority responsible for designing and implementing fiscal measures to manage the economy.