Fiscal and Monetary policy
1. Fiscal and Monetary Policy 2 hoursExecuted by Master of Arts, senior lecturer,
2. Fiscal and Monetary PolicyOBJECTIVES:
◦ Identify professional terminology enabling
Ss to widely apply it;
◦ Develop critical thinking skills;
◦ Enhance Ss ability for speaking, reading,
Fiscal and Monetary Policy
Public goods and services
Expansionary fiscal policy
Contractionary fiscal policy
Federal reserve bank
MEMORIZE THESE WORDS AND
Government economic policies designed to influence
macroeconomic performance are of two types: FISCAL
POLICY and MONETARY POLICY.
Goals of both types of government policies: 1) to promote
price level stability; 2) full employment; 3) achievement of the
natural level of real GDP.
involves the use of
expenditures and taxation.
MONETARY POLICY is concerned with control of money
supply and credit market conditions.
Reference: Н.М.Дюканова “Английский язык для экономистов”, p.260
8. Fiscal PolicyFiscal policy is carried out by the legislative and/ or the
executive branches of government. The two main instruments
are government expenditures and taxes.
Budget deficits and surpluses:
When government expenditures exceed government taxes
revenues in a given air, the government is running a budget
deficit for that year.
When government expenditures are less than tax revenues in a
year, the government is running a budget surplus for that year.
When government expenditures are exactly equal to tax
revenues in a
given air, the government is running a balanced budget for
11. Monetary PolicyMonetary policy is conducted by a nation`s central bank. In
the US it is carried out by the Federal Reserve Bank (“Fed”).
The Fed has 3 main instruments to conduct monetary policy:
open market operations, changed in reserve requirements,
and changes in the discount rates.
The Fed is engaging in expansionary monetary policy when it
uses any of instruments of monetary policy in such a way as
to cause an increase in the supply of money.
The Fed is said to engage in contractionary monetary policy
when it uses it instruments to effect a reduction in the
supply of money.