Comparison of Monetary and Fiscal Policy of UK and US

ESSAY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Comparison of the monetary and fiscal policy of the UK and the US-.......................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Monetary Fiscal can be defined as the activities of the central bank that are used to influence the
quantity of the money as well as the credit in the economy of the country. On the other hand, the
fiscal policy can be defined as the decisions of the government related to the taxation and
spending. Both these policies that is the monetary and the fiscal policy is used by the banks to
regulate the activity of the economy over the period (Aste, (2021). These are used for
accelerating the economic growth when the economy starts to decrease or goes to the moderate
growth. Along with this, the fiscal policy is also used for the redistribution of the income and
wealth of the economy. The main aim of the monetary policies is to promote and support the
maximum employment as well as stable the price and long term interest rate. The main aim of
the fiscal policy is to promote the stability of sustaining the aggregate demand as well as the
income of the private sector during the period of the economic downturn. This essay will discuss
the comparison of the monetary policies as well as the fiscal policies of the UK and the US using
the appropriate model of the macroeconomics.
MAIN BODY
Comparison of the monetary and fiscal policy of the UK and the US-
The pandemic has disturbed the economy of both the countries that is the UK and the US. The
banks or the financial institutions has responded towards the pandemic to have the smooth flow
of economy in the country. The businesses in the both the countries has the major impact as
many of them were closed, events were cancelled and the work from home policies were
introduced by the companies. Along with this, many of the people has lost their jobs because the
businesses does not earn much revenue so that they can give the wage and salaries to the
employees this has caused much economic disturbance in the countries.
The comparison can be supported by using the Keynesian Economic theory. This is the theory
which enables to know the total spending in the economy and its impacts on the output,
employment and the inflation. This is theory which was developed by the British economist to
understand the Great depression in the economy of the country (Walter & Wansleben, (2020).
This theory is based on the two main ideas that the aggregate demand is more likely as compared
to the aggregate supply for the primary cause of the short run economic recession and the other is