Today, Craig is going to dive into the controversy of monetary and fiscal policy. Monetary and fiscal policy are ways the government, and most notably the Federal Reserve, influences the economy – for better or for worse. So we’re going to start by looking at monetary policy, and specifically how the Federal Reserve uses interests rates as a means of controlling (or at least attempting to control) inflation. We’ll then move onto fiscal policy – that is the government’s use of taxation to raise and spend money. It’s all, well, pretty controversial, but as it seems Americans hate taxes the most, monetary policy is most often used – meaning that the Federal Reserve plays a hugely significant role in steering the U.S. economy.
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