The difference between fiscal policy and monetary policy is that
A)fiscal policy is macroeconomic policy and monetary policy is microeconomic policy
B)monetary policy is macroeconomic policy and fiscal policy is microeconomic policy
C)fiscal policy involves regulation of natural monopolies and monetary policy involves the provision of public goods
D)monetary policy involves regulation of the money supply and fiscal policy involves government spending and taxing
E)fiscal policy involves the promotion of competition and monetary policy involves collecting money to pay for taxes

Question

Quizplus · Accepted Answer

Fiscal policy refers to the government's use of taxation and spending to influence the economy, while monetary policy involves the central bank's regulation of the money supply and interest rates. Therefore, option D is the correct answer as it accurately describes the difference between fiscal policy and monetary policy.

The Difference Between Fiscal Policy and Monetary Policy Is That