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Fiscal Policy has to do with the Governments Budget. Which means government revenues and expenditures. Following this rule, the fiscal policy instruments are
1. Government Spending
2. Taxation
On the other hand, anything to do with the money market or the monetary sector is a monetary policy instrument. Like,
1. Open Market Operation (most widely used policy)
2. Discount Rate
3. Required Reserve Ratio
All these three are usually aimed at changing the Federal Funds Rate to influence the economy. Hope this helps. |
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