Fiscal and Monetary Policy (AP Government and Politics)

Tom Richey explains fiscal policy and monetary policy for students who are taking AP Government and college-level courses in American Government. Fiscal policy, which is set by Congress, involves policies about taxes, spending, and the federal budget. Monetary Policy, which is set by the Federal Reserve Board of Governors, regulates interest rates and the money supply.

Thumbnail Photo by Pictures of Money (Flickr)

[cobeyledford]

This is actually a major issue in my debate league this year. People have no idea how different they are and that they really are used mostly independently.

[bhunter]

Thank you Matt Demon
for this excellent lecture

[TL-wfcu]

Thank you sir very informative, like from China 🇨🇳.

[alexvilllegas]

Hey tom, Mr. Paul Stuewe is retiring this year, and in class we watch your AP Europeon history videos all the time and i just want to ask if you can make a quick video for us if you wishing him a happy retirement

[JanBruunAndersen]

No, the Federal Reserve does *not* control the amount of money. It may control the amount of US dollars. And it may influence the interest rates, but it does not control it. If the Fed decides to hike interest rates to 20% people, I could start offering loans at 10% and undercut the Fed. More realistically, people would start getting loans from banks in other countries.

[BuceGar]

Monetary Policy is the the thing that allows you to completely ignore Fiscal Policy. :-D