Importance Of Monetary Policy

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THE IMPORTANCE OF COORDINATION EURHYTHMIC AND SYNCHRONOUS BETWEEN MONETARY POLICY AND FISCAL POLICY IN THE MANAGEMENT, REGULATION MACROECONOMY 1.1. Definition Basically, Fiscal Policy is the policy of the government’s revenue and expenditure, also known as Fiscalpolicy. As for monetary policy is the implementation of overall measures and to use the tools of the central bank in order to contribute to achieving the objectives of macroeconomic policy through the dominant trend line and the volume of money transfers In fact, people often understand that Fiscal Policy by the Ministry of Finance is responsible for implementing and monetary policy also operated by Central Bank 1.2. The objective of Monetary Policy and Fiscal policy ♦ The…show more content…
So Fiscal Policy is one of the important policies for stability and implementation of macroeconomic policies, a strong Fiscal Policy will promote economic growth and as a basis for making enterprises make the large investment decisions. In relation to prices, Fiscal Policy is one of the underlying causes of inflation, an easing of pressure Fiscal Policy have increased prices of goods and services on the two channels is to boost aggregate demand and financing penetration…show more content…
Beside that, Fiscal Policy also affect international capital flows and the ability of Central Banks to control the flow of foreign currency, if Fiscal Policy is not reasonable, it will make the negatively impact on complementary sources capacity and increase risks related to international capital flows. ♦ Monetary Policy impact on Fiscal Policy depends on the level of adjustment of Monetary Policy instruments, a tightening of monetary policy would reduce investments, ability to collect taxes and revenue collection, a currency devaluation will increase the debt government foreign currency equivalent, if the Central Bank adjusts interest rates by rising, the prices of government bonds will decrease and affected on ability to balance the

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