1)How does the level of bank capital affect both monetary and fiscal economic policy?

2)What are the main differences in economic policy (fiscal and monetary) between Poland and for example Spain, Greece, UK and U.S.A.?

3)Why can't Indian economic policy be more capitalistic?

1)The difference between a bank's assets and liabilities is called the bank capital. An inadequate level of bank capital can result in a financial crisis. When the liabilities of the bank are more than its assets, then it has to borrow from the central bank to meets its requirements. The central bank has to use the monetary policy of printing money if its reserves are low. Also, low levels of bank capital can affect the fiscal policy which deals with taxes and expenditures. If the case of public sector undertakings (PSUs) is taken into consideration then, the government has to interfere in case of high liabilities because the banks will not be able to provide loans in that situation. For providing funds to the banks, the government increases the tax rates which is a fiscal policy tool.

2)Economic policies are majorly categorized in two broad classes which are monetary and fiscal policies. Monetary and fiscal policies are the two most recognized tools that are used by various governments to influence a country's economic activities. Monetary policy is concerned with a country's total amount of money circulating in its economy and the management of rates of interest. On the other hand, fiscal policy is concerned with the spending of governments and taxing. Economy policies in diverse nations differ. Poland's economic policies differ from those of other countries such as Japan, Greece, the UK, and the United States. Compared to other countries, the GDP of Poland has constantly increased where the main driver is domestic consumption which is greatly boosted by improving conditions of the labor markets, increased social transfers, low inflation, and low lending rates. Poland has also adopted a policy of economic liberalization which has greatly boosted the participation of private entities in economic activities. Compared to other countries, Poland has maintained a relatively low debt in relation to its GDP due to its policy that limits it from borrowing more than 65% of its GDP.

3)The Indian economy has a mixed economy. It is more of socialistic than capitalistic. Since the agriculture sector was playing a significant role in growth, but from the past few years, the service sector is growing incredibly, and India has the first-mover advantage in the service sector.

Indian economic policy cannot be more capitalistic due to the large population of India. Indian economy is an agrarian economy; most of the people live in villages. Illiteracy rate and the poverty rate are also high in India. Capitalism does not help people who lived in rural areas because they are not skilled. Capitalism helps only fewer people with having a source of production and innovative ideas, but due to illiteracy, people are not so innovative, which makes capitalism difficult to exist.