Monetary policy seeks to influence the macro economy by influencing the
quantity of money and credit in the economy, while fiscal policy involves
the use of government spending and taxation to influence economic
activity.
Economics MCQ - Economics Section 2
The primary goal of a fiscal policy is to use taxation and spending to influence the economic activity.
To fulfill its role as a medium of exchange, money should have a high
value relative to its weight.
Money can buy goods and services – medium of exchange. Money does
not perish physically – acts as a store of wealth. Money can define price
of goods and services – unit of account.
Narrow money generally means notes and coins in circulation in an
economy, plus other very highly liquid deposits. Broad money: Narrow
money plus the entire range of liquid assets used to make purchases.
