economic policy
actions that governments take in the economic field
AI overview
Economic policy refers to the actions that governments take to manage their economies, such as setting interest rates, collecting taxes, or spending money on programs. It matters because these decisions affect things like job availability, prices, and people's overall financial well-being.
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Article
Economic policy refers to government actions setting levels of taxation, government budgets, the money supply and interest rates as well as the labour market, and many other areas of government interventions into the economy. Economic policy is a broad term for both the goals governments pursue and the tools they use.
Most economic policy instruments can be divided into either fiscal policy, which deals with government revenue and expenditure decisions, or monetary policy, which deals with central banking actions regarding the money supply and interest rates. In addition, governments shape economies through industrial policy, regulatory frameworks, redistribution through taxes and transfers, and trade policy. At the international level, institutions such as the International Monetary Fund and World Bank shape policy formulation.