Welcome to the heart of economic governance – the realm of fiscal and monetary policy tools, where governments and central banks wield instruments to steer economies towards stability and growth. For UPSC aspirants, mastering these tools isn’t just about memorizing concepts; it’s about understanding their intricate mechanisms and the profound impact they have on economic landscapes.
In this blog series, we embark on an enlightening journey through the realms of fiscal and monetary policy, armed with the invaluable tool of mnemonics. Mnemonics offer a structured approach to memorization, enabling aspirants to retain and recall key details about these economic policies effortlessly.
Tools for Monetary Policy
Mnemonic: RC is RuDe
R: Reserve Requirements (Cash Reserve Ratio)
D: Discount Rate (Interest rate at which commercial banks borrow from the central bank)
R: Repurchase Agreements (Repo Rate)
C: Open Market Operations (Buying and selling of government securities)
Tools for Fiscal Policy
Mnemonic: TT GET tickets.
T: Taxation (Direct and Indirect Taxes)
T: Transfer Payments (Government assistance programs like welfare, unemployment benefits)
G: Government Spending (Expenditure on goods, services, and infrastructure)
T: Tariffs (Import taxes)
E: Excise Duties (Taxes on specific goods like alcohol, tobacco)
Also read about Mnemonics for Agriculture Revolution.