Economics Made Economical

Category Archives: Monetary Policy

What Is Fiscal Policy?

Recently I wrote about a faux pas committed by several supporters of Ron Paul regarding their misunderstanding of economic Fiscal Policy and their subsequent berating of any economists who tried to explain to them that the everyday use of the term fiscal policy as understood by the general public is not the same as the …

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What Is Deflation?

Deflation, the opposite of  inflation, can often result during contractionary economic period when the interest rate becomes too high. A higher interest rate causes less spending, more saving, less borrowing from banks, and more loaning to banks. It acts to slow down our economic growth and may, if not regulated in time, lead to a …

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Fed Decides Not To Change Interest Rate

The Fed today decided to keep the prime rate at 0.25% because the economy has not yet grown to the extent they want it to. It’s obvious to most of us that the economy has not grown. What’s most disturbing about this to me is that the Fed is hesitant to ever reduce its rate …

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The U.S. Economy

Is the U.S. Economy Worsening?   Related articles U.S. economy hits another big bump ( Why Consumer Spending Will Continue to Drop, According to Leading Financial Newsletter Profit Confidential (

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The Glossary, Part II: Fiscal Policy vs. Monetary Policy

Monetary Policy: Policy enacted by the Federal Reserve Bank in an attempt to improve the U.S. economy. Fiscal Policy: Policy enacted by the federal government including the President or Congress in an attempt to improve the U.S. economy.

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