Monday, 2 September 2019

MOVING from Contractionary Fiscal & Monetary Policy to Expansionary Monetary Policy & Contractionary Fiscal Policy

MOVING from Contractionary Fiscal & Monetary Policy to Expansionary Monetary Policy & Contractionary Fiscal Policy


Contractionary  Monetary Policy & Fiscal Policy results in
Higher Interest Rates, Lower Spending by the Private & Public sector as a result Lower production which finally results into Lower GDP.


Indian Government trying to shift from

Contractionary Fiscal & Monetary Policy



 to


Contractionary Fiscal Policy & Expansionary Monetary Policy results in
Lower Interest Rates, Lower Spending by the  Public sector, Comparatively good sepending by the Private Sector but Output varies  as a result instability with the GDP.



Expansionary Monetary Policy & Contractionary Fiscal Policy


Contractionary Fiscal Policy are also sometimes referred as Tax Terrorism, if it is politically motivated. 
Effects of Expansionary Monetary Policy are more effective when it is mingled with Expansionary Fiscal Policy.
But at the same time it's good to note that Inflation is just in the initial level of WALKING INFLATION & there is not much deviation of actual from the standard one from last 4-5 months.
*MENTORS can correct, If I am wrong some where* :)


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