Assignment no 3

Submitted to : Sir Husnain

Submitted by :khubaib Anwar (22l- 6355)
Fiscal policy: -
Fiscal policy is the policy in which government's plan to influence their economy through
spending and taxation, with an emphasis on elements such as demand, job creation,
inflation, and total growth. In the United States, the president and Congress have an
impact on the government's spending and tax policies.

Tools: -
Public spending refers to the government's funds, which are divided into two
categories revenue and capital expenditure. Revenue spending is used to fund regular
operations and public services, rather than building long-term assets or benefits. Capital
expenditure refers to expenditures in assets that are intended to provide benefits across
numerous accounting periods, with the goal of increasing the economy's productive
capacity.
Public revenue is made up of both income and capital receipts. Revenue receipts Open
market operations is control central banks buying or selling securities from or to private
banks. When central banks buy securities they increase bank cash reserves and giving
them more funds to lend out. or selling securities reduces the central bank's cash
holdings. the economy improves, central banks may allow these securities to expire,
make it to normalize their balance sheets
Discount rates is that in which the central bank giving discount to their customers.
Typically higher than the federal funds rate and banks resort to this option only when
they cannot borrow from other banks.
Interest rates on excess reserves are set by central banks such as the Federal Reserve, the
Bank of England, and the European Central Bank. They pay interest on any excess
reserves held by banks. Adjusting this rate can encourage or discourage lending, thereby
affecting overall economic activity. Moreover, it supports the fed funds rate target.
Reserve requirements dictate the amount of money banks must keep in reserve overnight,
which they can hold either in their vaults or at the central bank. Lower reserve
requirements enable banks to lend out a larger portion of their deposits, stimulating
economic activity. obligations or assets, whereas capital receipts are income that does.
Revenue receipts are regular, whereas capital receipts come from exceptional or one-time
transactions.
Monetary policy: -
The monetary policy in which the central bank control interest rates and the the money
supply in economy by purchasing or borrowing treasury bills by commercial banks.
because to control the money supply and interest rates for price stability and financial
markets .

Tool: -
Open market operations is control central banks buying or selling securities from or to
private banks. When central banks buy securities they increase bank cash reserves and
giving them more funds to lend out. or selling securities reduces the central bank's cash
holdings. the economy improves, central banks may allow these securities to expire,
make it to normalize their balance sheets.
Discount rates is that in which the central bank giving discount to their customers.
Typically higher than the federal funds rate and banks resort to this option only when
they cannot borrow from other banks.
Interest rates on excess reserves are set by central banks such as the Federal Reserve, the
Bank of England, and the European Central Bank. They pay interest on any excess
reserves held by banks. Adjusting this rate can encourage or discourage lending, thereby
affecting overall economic activity. Moreover, it supports the fed funds rate target.
Reserve requirements dictate the amount of money banks must keep in reserve overnight,
which they can hold either in their vaults or at the central bank. Lower reserve
requirements enable banks to lend out a larger portion of their deposits, stimulating
economic activity.