Economic Policies – Essay Sample
In the world today, there are many different economic policies that guide nations towards fiscal success. Each of these policies has different strengths, weaknesses, effectiveness and policies. An economic policy is, basically, how a government acts in the global economic market. The reason that governments employ economic policy is to stimulate their own economy, lower unemployment, and establish fair and constant selling prices. There are dozens of terms used to describe the specific economic policies and describing each individual one would be impossible, save in a ten-thousand page book. However, there are ways to generalize the types of economic policies present in the world today. For many economists, there are two general types of economic policies: these are fiscal policy and monetary policy.
- Fiscal policy mainly refers to the government’s influence on the global economy through spending. By spending money, governments can create new workplaces and facilities, or sway the product market in their favor. Taxing is a key tool towards achieving fiscal policies.
- Monetary policy refers to the government’s control over money. By controlling the money supply, governments can influence pricing, change currency value and perform a great many other tasks to stimulate the economy.
- Fiscal and monetary policies are the two most general types of economic policy in the world today. They address the government’s ideas and actions regarding the global market and what they hope to achieve from those financial actions. Some more specific types of economic policy include:
- Industrial. An industrial policy has a more specific goal than a general fiscal or monetary policy. Countries that employ an industrial economic policy aim to increase production and further develop the nation’s manufacturing industries. With this policy, the government aims to alter infrastructure and protect industries that will improve the economy.
- Regulation. An economic policy of regulation refers to government constraints on trade and economics. This can include regulations against monopoly formations, price control, employment requirements, sanctions and other economic rules and laws. The main purpose if to impose specific government regulations across the board, usually to promote equality, provide protection and stimulate growth.
- Redistribution. An economic policy of redistribution aims to take a certain amount of income, property or other goods from profitable individuals and redistribute them to the less profitable. The goal of this economic policy is to provide all citizens with an equal share of profit, but this is one policy that has received astounding criticism, rejection and opposition.
There are still many other economic policies at work in countries today, and leading researchers are still developing extensive economic policy terms. In general, though, any economic policies work in a similar way; they are designed to protect the economy of the country while promoting growth and expansion.
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