What are similarities and differences between fiscal policy and monetary policy?

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Fiscal policy and monetary policy are similar in two aspects. First, they both represent a nation’s policies to regulate its economy. They both can be expansionary to increase the aggregate demand during recession or restrictive to decrease the aggregate demand when the economy is overheated. Secondly, they are used for the same purpose of keeping economy growth at a steady pace, ensuring a low unemployment rate, and maintaining the value of a nation’s currency. They are often implemented in coordination to exert influence on a nation’s economy.

Fiscal policy and monetary policy are different in two aspects, too. First, they are devised and carried out by different organizations. Fiscal policy is the domain of the government while momentary policy is in the charge of the monetary authorities. In the United States, the President and the Congress control fiscal policy and the Federal Reserve controls monetary policy. Second, they affect the economy through different means. Fiscal...

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