Government policies for achieving macroeconomic objectives
What is the difference between monetary and fiscal policies?
Monetary policy refers to the actions taken by a central bank to control the money supply, interest rates, and credit conditions to influence economic activity. Fiscal policy involves the use of government spending, taxation, and borrowing to influence economic conditions and achieve policy objectives.
How do supply-side policies stimulate economic growth?
Supply-side policies stimulate economic growth by focusing on improving the productive capacity of the economy. These policies aim to enhance the supply side of the economy by reducing barriers to production, promoting entrepreneurship, encouraging investment in physical and human capital, supporting research and development, fostering innovation, streamlining regulations, improving infrastructure, and implementing labor market reforms. By increasing the efficiency and competitiveness of businesses, supply-side policies can lead to higher productivity, increased output, job creation, and sustained economic growth.