Macroeconomic policy instruments refer to macroeconomic quantities that can be directly controlled by an economic policy maker. Instruments can be divided into two subsets: a) Monetary policy instruments and b) Fiscal policy instruments. Monetary policy is conducted by the Federal Reserve or the central bank of a country or supranational region (Euro zone). Fiscal policy is conducted by the Executive and Legislative Branches of the Government and deals with managing a nation’s Budget.
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“A policy is a temporary creed liable to be changed, but while it holds good it has got to be pursued with apostolic zeal.”
—Mohandas K. Gandhi (1869–1948)
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