6 Difference Between Fiscal Policy And Monetary Policy

1. Monetary policy involves changing the interest rate and influencing the money supply.
2. Fiscal policy involves the government changing tax rates and levels of government spending to influence aggregate demand in the economy.
3. Administered by
Fiscal policy:
Ministry of Finance
Monetary policy:
Central Bank
4. Focuses on
Fiscal policy:
Economic Growth
Monetary policy:
Economic Stability
5. Political influence
Fiscal policy:
Yes
Monetary policy:
No
6. Monetary policy is quicker to implement. Interest rates can be set every month. A decision to increase government spending may take time to decide where to spend the money.