Explore BrainMass

How Important is Monetary-Fiscal Policy Coordination?

How important is monetary-fiscal policy coordination? What are the major differences between an open and closed economy? Do flexible or fixed exchange rates work the best? Under what circumstances?

Solution Preview

Monetary and fiscal policy coordination is very important, due to the fact that the supply of money that is available within a nation must be equitable and or in direct correlation with the quantity of money that is spent by the government in conducting its daily operational procedures. Any differences between the monetary and fiscal policy within a government would result in a detrimental financial and economic ...