Fiscal, monetary and supply-side policies, and the trade-offs governments face between macroeconomic objectives.
Governments use policy to pursue four main objectives: growth, low unemployment, low inflation and a stable balance of payments.
Fiscal policy
The use of government spending and taxation. Expansionary fiscal policy (more spending or lower taxes) raises AD to boost growth; contractionary policy reduces AD to control inflation.
Viewing only
This content is free to read on superexams.com and cannot be printed or downloaded.
Read the full note — free
Create a free account to read this note in full. Every free account gets 2 complete revision notes — no card needed.