Saturday, April 28, 2012
Moneyball
Your AP Government and Politics tests will likely overlap into some economic policy. So, as a source of review, consider the two sides of our current ongoing game of Moneyball.
Question: What is the difference between fiscal and monetary policy?
Answer: Fiscal = budgetary choices of taxing and spending
Monetary = federal reserve decisions on interest rates and monetary supply.
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The difference between fiscal and monetary policy is that fiscal policy is controlled by the government by using taxes and government spending in order to regulate the economy. Monetary policy is controlled by the fed by using government bonds, the discount rate, or the reserve ratio to control the supply of money. Learned that in AP Macro!
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