Answer Posted / kaps

Fiscal policy refers to a government's use of spending and taxation to influence economic activity.
The budget is said to be balanced when tax revenues equal
government expenditures. A budget surplus occurs when government tax revenues exceed expenditures, and a budget deficit occurs when government expenditures exceed
tax revenues.

Monetary policy refers to the central bank's actions that affect the quantity of money and credit in an economy in order to influence economic activity. Monetary policy is
said to be expansionary (or accommodative or easy) when the central bank increases the quantity of money and credit in an economy. Conversely, when the central bank is
reducing the quantity of money and credit in an economy, the monetary policy is said to be contractionary (or restrictive or tight).

Both monetary and fiscal policies are used by policymakers with the goals of maintaining stable prices and producing positive economic growth. Fiscal policy can also be used as a tool for redistribution of income and wealth.

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