Question.1001 - Pro: Policymakers Should Try to Stabilize the Economy
Answer Below:
An equal balance between supply and demand is necessary to stabilize the economy. The government implements a stabilization policy method to maintain a healthy level of economic growth and minimal price changes, resulting in reduced unemployment rates, greater earnings, and more economic growth (Economic Stability, 2020). The economy can be stabilized using a variety of tools available to policymakers. Monetary, fiscal, and regulatory policies are some of these tools. The employment of interest rates to manage the money supply is known as monetary policy. Government spending and taxation are used by fiscal policy to affect the economy (MARK HORTON & ASMAA EL-GANAINY, 2019). Applying rules and regulations to manage economic activity is a regulatory policy. When the economy is stable, most businesses may increase their staff counts, perhaps lowering the unemployment rate. They are more likely to pay their workers big wages, which could lead to better living conditions. Businesses are more eager to expand and invest, which could lead to additional job opportunities and foster economic growth. A stable economy may promote social justice, improve healthcare and education, and eradicate poverty. When people have jobs and earn enough money to live on, they are more likely to be able to buy basics like food, shelter, and clothing. References MARK HORTON is the Assistant Director, and ASMAA EL-GANAINY is an Economist in the IMF’s Fiscal Affairs Department. (2019) Fiscal policy: Taking and giving away, IMF. Available at: https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Fiscal-Policy. Economic stability (2020) Network for Public Health Law. Available at: https://www.networkforphl.org/resources/topics/covid-19-health-equity/economic-stability/#:~:text=Economic%20stability%20means%20that%20people,and%20access%20to%20reliable%20transportation.More Articles From Economics
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