Economics Online Tutor
Fiscal & Monetary
Policies
The discussion of fiscal and monetary policies begins with AN OVERVIEW OF FISCAL POLICY
INFRASTRUCTURE:

Basic public institutions and facilities including an education system and a
system of roads and bridges.
Governments have three sources of funds to pay for expenditures: printing
money, borrowing money, and collecting taxes.

In the United States, only the federal government is allowed to print money.  
Also, state and local governments in the United States are limited by law in the
types of borrowing and taxation that they are allowed to use.
Fiscal and monetary policies are involved in every aspect of the operation of
governments.  These policies are often thought of in terms of discretionary
policies.  Discretionary fiscal and monetary policies involve government's
active role in the economy in an attempt to create a specific outcome.

Economic growth, employment, and stable prices are goals that fiscal and
monetary polices attempt to achieve.  In the United States, these goals have
been codified into law with the Employment Act of 1946.

Discretionary fiscal and monetary policies can be used to achieve other
outcomes as well.  Wealth distribution, market failures, and infrastructure are
among the possible targets of government policy.
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