Economic Policy Making Fiscal Policy - the use of changes in government spending or taxation to change national economic variables, like the unemployment rate Keynesian Economic Theory posits that using fiscal policy can alter economic variables(increasing government spending during economic turn downturns for example) Monetary Policy- the use of changes in th the money supply to change credit markets, unemployment and the inflation rate Monetary policy is determined by the Federal Open Market Committee(FOMC), part of the Federal Reserve systemEconomic Policy Making Fiscal Policy – the use of changes in government spending or taxation to change national economic variables, like the unemployment rate - Keynesian Economic Theory posits that using fiscal policy can alter economic variables (increasing government spending during economic turn downturns, for example) Monetary Policy – the use of changes in the money supply to change credit markets, unemployment and the inflation rate - Monetary policy is determined by the Federal Open Market Committee (FOMC), part of the Federal Reserve System