Fiscal vs
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Questions and Answers

Which of the following best describes fiscal policy?

  • The control of inflation and unemployment rates
  • The management of interest rates and money supply by the central bank
  • The management of government spending and taxation to influence the overall economy (correct)
  • The regulation of financial institutions and markets
  • Which of the following best describes monetary policy?

  • The management of interest rates and money supply by the central bank (correct)
  • The management of government spending and taxation to influence the overall economy
  • The control of inflation and unemployment rates
  • The regulation of financial institutions and markets
  • What is the main difference between fiscal and monetary policy?

  • Fiscal policy involves government spending and taxation, while monetary policy involves interest rates and money supply (correct)
  • Fiscal policy focuses on interest rates, while monetary policy focuses on government spending
  • Fiscal policy involves managing the money supply, while monetary policy involves managing government revenues
  • Fiscal policy is controlled by the central bank, while monetary policy is controlled by the government
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