Fiscal and Monetary Policy

Paper Summary:

This paper answers questions regarding the importance of fiscal and monetary policy. It also describes the affects they will have on interest rates, income levels, spending, savings as well as government expenditures.

From the Paper:

"Expansionary policy is a description of actions used to help increase the money supply in an economic system. For example if money supply is low or the amount of money being spent in an economy is low then banks may choose to lower interest rates and employers may choose to raise income or government reduce taxes. Regardless there will be more money in the economy, which will also increase the amount of investments individuals might choose as well as overall increases of capital. In addition to this the standard of living will most likely increase due to the additional funds each household would have in their discretionary income. Although some savings will also increase most often the increase in money is observed by households spending more and is relative to their income. It is true, the more one makes the more one spends."

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