Fiscal vs. Monetary Policy In the past, the government has done little to control the economy. Since the depression, the ideas of the government has changed drastically. Now in today�s times, we have come to realize that the government has two important roles to play that will regulate and ensure a stable economy. The government can achieve this by enacting two policies and they are Fiscal and Monetary Policy. In order to gain a greater understanding, we must first define each policy and understand how these policies are used towards our economic growth. To start, Fiscal policy is the use of the Federal government power of spending and taxation to help stabilize the business cycle. Therefore, if the economy is in a recession, then the fiscal policy is to increase spending or to reduce taxes; Also known as expansionary policy. On the other hand, during cycles of high inflation, the opposite occurs and spending decrease or taxes increase; also known as contractionary policy. The consequences of fiscal policy are looked at as the federal deficit. The opposite of fi......

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