Monetary and Fiscal Policy Explained

Learn about the difference between monetary and fiscal policy in the latest video from Alanis Business Academy

[trishlaphul]

That was pretty clear explanation of the concepts ! thank you !

[sening]

thank you so much for the explanation it helped a lot

[ranjitabehera]

thank u helped it a lot in understanding .

[Mujangga]

Is it necessary for a government to have a Central Bank? What if the Constitution forbade the government from borrowing and lending money? What if Constitution set a limit to government spending and there existed only a 10% Income Tax and nothing else? What would happen?

[karfar]

This video is either intentionally wrong or just published by people who are very misguided because they were taught a theology of ecenomics that disregards reality for the sake of consistency.

1) Fiscal policy is the birth and destruction of dollars via spending and taxation.

2) Monetary policy is determining or controlling the cost to obtain credit.


Banks have two accounts with the Fed, a securities account and a reserve account. Moving a sum of government liabilities from a bank's securities account to the bank's reserve account is not printing money or increasing the overall supply. It is simply changing the form of the government's liability. Monetary policy is not the creation or destruction of money, that's fiscal policy.

Securities can only be purchased with reserves. Converting those securities back to reserves is not money creation. The creation of reserves only occurs through fiscal policy.

Banks, excluding cash, never lend any fraction of reserves to their members. They only ever lend monetized bank credit. What we have are minimum reserve ratio requirements, not fractional reserve banking. We haven't had fractional reserve banking for over a century.

[flop]

i dont understand anything hes saying. I guess the problem is with me

[pamelawang]

Capital is to keep the health of the economy productive for advancement of any investment of evolution of economic growth of we are the city literally. Reserve is interest capital charged in a flexible rate to not have monopolisation at all.