15 July 2012
Monetary policy is policy by which the amount of money and credit available aims to affect the economy. For instance, when you read that the RBI has decided to lower or raise the CRR - you are reading the example of Monetary Policy.
Government spending and taxing policies that aim to affect the economy are fiscal policies. For instance, the recent economic stimulus package, through which the government spent a great deal of money in order to try and stimulate the economy, is an example of fiscal policy.
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