Topics: Monetary policy, Federal Reserve System, Central bank Pages: 2 (423 words) Published: July 28, 2013
Fiscal policy refers to the federal government’s efforts to keep the economy stable by increasing or decreasing taxes or government spending. The first fiscal policy tool is taxation. High tax rates tend to slow the economy because they draw money away from the private sector and put it into the government. High tax rates may discourage small-business ownership because they decrease the profits businesses can earn and make the effort less rewarding. Monetary policy is the management of the money supply and interest rates by the Federal Reserve Bank. The Fed’s most visible role is the raising and lowering of interest rates. When the economy is booming, the Fed tends to raise interest rates. This makes money more expensive to borrow. Businesses thus borrow less, and the economy slows as businesspeople spend less money on everything they need to grow including labor and machinery. One of the main differences between fiscal and monetary policy is who manages it. The federal government is involved with fiscal policy while the Federal Reserve Bank manages monetary policy. In fiscal policy, taxes are decreased and increased to stabilize the economy which can hurt some small business owners in the long run. In monetary policy the interest rates are decreased and increased to limit or promote borrowing money. Of the two, I feel that monetary policy is more efficient for the economy. If people are making more money they are going to be willing to pay higher interest rates. In the same context, if the economy goes through a rough patch, interest rates are lowered in order to stabilize it.

Compliance-based ethics codes emphasize preventing unlawful behavior by increasing control and penalizing wrongdoers. Integrity-based ethics codes define the organization’s guiding values, create an environment that supports ethically sound behavior, and stress shared accountability. The difference between a compliance-based ethics codes and an integrity-based ethics code is that in a...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on ECO 550 Midterm Exam
  • Midterm Essay
  • Midterm Essay
  • Essay on Midterm
  • midterm Research Paper
  • Midterm Essay
  • Midterm Essay
  • Essay about midterm

Become a StudyMode Member

Sign Up - It's Free