Fiscal policy deals with the government's spending and taxation practices. The changes in fiscal policy affect households
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- Fiscal policy deals with the government's spending and taxation practices. The changes in fiscal policy affect households and firms (companies) in the economy. Monetary Policy refers to the actions of the Federal Reserve to control (regulate) money supply to influence the rate of interests in the economy. The change in the rate of interests affects companies and households. Suppose the Federal Reserve increased the money supply to reduce the rate of interest.
How can a company prepare itself to deal with the changes in fiscal policy and monetary policy?
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