Today we are going to discuss Monetary policy and fiscal policy specifically from UPSC point of view.   In End, I am going to discuss a question which was asked in the UPSC pre-exam.   Monetary policy vs Fiscal policy   The main difference between Monetary policy and Fiscal policy is that   Monetary policy is decided by central bank[eg. RBI] Fiscal policy is decided by Government.   Let's discuss the topic in Detail.   What is Monetary policy?   It is a macroeconomic policy designed by the central bank of a country , to manage money supply & interest rates. It helps shaping variables such as inflation, consumption, savings, investment, and capital formation    It plays an important role in  price stability [inflation control],  economic growth,  job creation and  social justice in any economy.     Milton Friedman [American economist] - whose research on monetary p...