Economic policy is a collective term for all the measures taken by the authorities to influence economic development in the country. It is the state in particular that conducts such policy. However, the counties and municipalities can take measures with the same purpose to a limited extent.
The objectives of the policy
The aims of the policy are to stabilize economic activity that is to say to counteract unemployment and inflation. In addition, it stimulates economic growth and influences business structure and income distribution.
The most important instruments in stabilization and growth policy are fiscal policy, and monetary and credit policy. The state’s finances are based on the state budget, which indicates the state’s income and expenditures.