Monetary policy is a variety of policies and measures that the central bank uses various tools to adjust the money supply in order to achieve the set goals, and then affect the macroeconomic operation. It mainly includes credit policy and interest rate policy. Shrinking credit and raising interest rates are "tight" monetary policies, which can curb the total social demand, but will limit investment and short-term development. On the contrary, it is a "loose" monetary policy, which can expand the total social demand and is conducive to investment and short-term development, but it is easy to cause the inflation rate to rise. Fiscal policy includes national tax policy and fiscal expenditure policy. Increasing taxes and reducing expenditures is a "tight" fiscal policy, which can reduce the total social demand, but it is not good for investment. On the contrary, it is a "loose" fiscal policy, which is conducive to investment, but the expansion of total social demand is easy to lead to inflation.