Economic policy refers to the actions and strategies implemented by a government or institution to influence its economy’s overall functioning and performance. It encompasses a broad range of measures aimed at managing economic variables such as employment, inflation, growth, and trade. Economic policy can be categorized primarily into two types: fiscal policy and monetary policy.
Fiscal policy involves government spending and taxation decisions to achieve desired economic outcomes. This can include adjusting tax rates, altering public spending levels, and implementing budgetary measures to encourage economic growth or control inflation.
Monetary policy, on the other hand, concerns the management of money supply and interest rates by a country’s central bank. Through tools like interest rate adjustments and open market operations, monetary policy aims to achieve stable prices, full employment, and economic growth.
Overall, economic policy serves as a framework for guiding the economy towards specific goals, addressing economic issues, and responding to internal and external economic challenges. Its effectiveness can significantly impact the overall well-being of a nation’s population and its economic stability.
China stands on edge as Donald Trump regains the US presidency, resurrecting fears of a return to his aggressive trade policies. Once again, the self-proclaimed "Tariff Man" signals plans to…