Fiscal and Monetary Policies
Learn more about fiscal and monetary policy and the supply and demand curve, with this free economics course.Publisher: Khan Academy
CertificationView course modules
When people talk about monetary policy, they are referring to the management of interest rates and the total supply of money in circulation. This is generally carried out by central banks, such as the U.S. Federal Reserve. This course will teach you how monetary policy impacts the changing of interest rates and influences money supply. You will also study equilibrium, which is the point where demand and supply for money cross.
Fiscal policy involves changing tax rates and levels of government spending to influence aggregate demand in the nation's economy. With this course, you will learn that instead of adjusting spending through fiscal policy, the government can adjust taxes to change aggregate demand. Increasing the supply of money in the marketplace will normally increase aggregate demand. You will study how central banks can reduce the amount of money in the market by selling bonds.
Fiscal and monetary policy are very important economics concepts, as they can have profound effects on the lives and livelihoods of a country's entire population. This course will teach you how monetary policy affects the money market indirectly and how fiscal policy affects it directly. By the end of the course, your knowledge of essential economics fundamentals will be much stronger. So why wait? Get started, today.Start Course Now
Understanding Fiscal and Monetary Policies
Understanding Fiscal and Monetary Policies - Learning Outcomes
Interest as Rent for Money
Money Supply and Demand Impacting Interest Rates
Monetary and Fiscal Policy
Tax Lever of Fiscal Policy
Understanding Fiscal and Monetary Policies - Lesson Summary
Having completed this course, you will be able to:
- Examine the concept of viewing interest as 'rent for money'
- Describe how money Supply and Demand impacts interest rates
- Discuss how central banks use monetary policy to adjust the money in the market
- Examine how a fiscal policy can change GDP
- Outline how changes to tax or government spending can have similar effects on GDP
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