ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -We set monetary policy to achieve the Government’s target of keeping inflation at 2%. Low and stable inflation is good for the UK’s economy and it is our main monetary policy aim. We also support the Government’s other economic aims for growth and employment.

Detailed explanation-2: -We are the UK’s central bank So we produce banknotes (cash) and oversee many of the other payment systems you use (eg with a debit or credit card). We also work to keep the cost of living stable so your money keeps its purchasing power. One way we do this is by changing the main interest rate in the UK.

Detailed explanation-3: -Fiscal policy refers to the tax and spending policies of the federal government. Fiscal policy decisions are determined by the Congress and the Administration; the Fed plays no role in determining fiscal policy.

Detailed explanation-4: -Monetary policy addresses interest rates and the supply of money in circulation, and it is generally managed by a central bank. Fiscal policy addresses taxation and government spending, and it is generally determined by government legislation.