Monetary And Fiscal Policy

Part I of Essay
The Monetary and Fiscal Policies, although controlled by two different organizations, are the ways that our economy is kept under control. Both policies have their strengths and weaknesses, some situations favoring use of both policies, but most of the time, only one is nec ....

Part II of Essay
.... reserve requirement. The tool known as open market operations influences money and credit operations by buying and selling of government securities on the open market. This is used to control overall money supply. If the Fed believes there is not enough money in circulation, then they will buy the securities from member banks. If the Fed believes there is too much money in the economy, they will sell the securities back to the banks. Because it is easier to make gradual changes in the supply of money, open market operations are use more regula ....