How are Fiscal Policy and the Federal Reserve similar?

The correct answer is They both try to promote economic stability.

• Fiscal policy of India always has two objectives, namely improving the growth performance of the economy and ensuring social justice to the people.
• Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy through which a central bank influences a nation's money supply.
• Some of the major instruments of fiscal policy are as follows: Budget, Taxation, Public Expenditure, public revenue, Public Debt, and Fiscal Deficit in the economy.
• Objectives of Fiscal Policy are given below:
  • To maintain and achieve full employment.
  • To stabilize the price level.
  • To stabilize the growth rate of the economy.
  • To maintain equilibrium in the Balance of Payments.
  • To promote the economic development of underdeveloped countries.
• Monetary policy in the United States comprises the Federal Reserve's actions and communications to promote maximum employment, stable prices, and moderate long-term interest rates--the economic goals the congress has instructed the Federal Reserve to pursue.
• Monetary Policy: 
  • It refers to the management of money supply for achieving macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity. 
  • In India, the Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy. This responsibility is explicitly mandated under the Reserve Bank of India Act, 1934.
  • The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.
• Both policies try to promote economic stability.