Interventionist supply-side policies take a proactive approach to economic growth. Unlike free-market supply-side policies that focus on reducing government intervention, this approach uses targeted government investment to address the limitations of
Economic Policy
Market-Based Supply-Side Policy + Examples: Growing Through Privatization & Less Intervention
Market-based supply-side policy is an economic tool designed to stimulate growth by promoting private-sector participation and reducing government intervention. This approach aims to unleash the power of competition and market forces to drive
Contractionary Fiscal Policy: A Tool for Price Stability and Economic Health
Contractionary fiscal policy is a set of government actions designed to slow down economic growth and combat inflation. Imagine an overly heated economy like a car speeding out of control. Contractionary measures act as the brakes, aiming to bring
Expansionary Fiscal Policy: Boosting the Economy – Tools, Impacts
Expansionary fiscal policy is a powerful tool wielded by governments to stimulate economic activity and combat economic slowdowns or recessions. It's essentially a strategy to jumpstart the economy by putting more money into the hands of consumers
Discretionary Fiscal Policy: The Government’s Tool to Steer the Economy – Types, Effects
Discretionary fiscal policy isn't about autopilot. It's a deliberate strategy governments use to influence the economy's direction. By adjusting spending and taxation, policymakers aim to achieve a stable economic climate, promoting growth and
Deregulation as Supply-Side Policy: Examining Economic Growth Strategies (Examples, Pros, Cons)
What's it: Deregulation refers to reducing or removing regulations to promote economic activities, competition, and free markets. Deregulation trends gained popularity due to new trends in economic thinking, criticizing government regulations'
Structural Policy: Building a Stronger Economy – Goals, Examples, Impacts
What's it: Structural policies are government policies that influence the potential output and influence the private sector's choice to allocate economic resources. Long story short, it is an economic policy to influence long-run aggregate
Fiat Money Explained: Pros, Cons & How It Works (End of Gold Standard?)
What's it: Fiat money is a currency with no intrinsic value but is a legal tender in an economy. An example of fiat money is paper money. The face value of fiat money is what you see, and it appears on the paper. Meanwhile, its real value is how
Abenomics: Reviving Japan’s Economy – Programs
What's it: Abenomics refers to the Japanese prime minister's economic policies, Shinzo Abe. The naming is similar to Obamanomics, proposed by Barack Obama, Clintonomics by Bill Clinton, and Reaganomics by Ronald Reagan.When Prime Minister Abe
Expansionary Monetary Policy: Boosting Growth with Lower Rates – Goals, Tools, Effects
What's it: An expansionary monetary policy, or a loose monetary policy, is a monetary policy aiming to increase the economy's money supply. The increased money supply should stimulate economic growth through aggregate demand. The injection of money
Gold Standard: Pros, Cons, & History (Why It Ended, Is it Coming Back?)
What's it: A gold standard is a monetary system in which the government pegs the domestic currency to gold. Under this system, the face value of your money is equivalent to the gold you will get when you exchange it. So, the government agreed to
Contractionary Monetary Policy: Taming Inflation With Higher Rates – Tools, Impacts
What's it? A contractionary monetary policy, tight monetary policy, or restrictive monetary policy is a monetary policy aimed at reducing the money supply's growth rate in the economy. Its aim is to reduce the pressure caused by high inflation and to
Trickle-Down Effect: Meaning, How it Works, Effects, Criticism
What's it: The trickle-down effect, also known as trickle-down economics, is a theory that's been around for decades. It argues that economic benefits should flow from the top down. In simpler terms, the theory suggests that by giving tax breaks and
Liquidity Trap Explained: Stuck at a Zero Rate – Causes, Impacts, Solutions
What's it? A liquidity trap is a situation in which an expansionary monetary policy cannot further lower interest rates. As a result, these policies are unable to generate economic growth or push up the inflation rate. In simpler terms, the central
Purchasing Power of Money Explained: How Much You Can Buy (Inflation’s Impact)
What's it: The purchasing power of money is a currency's ability to convert it to goods and services. In other words, it is the conversion rate of money towards goods and services. Another term for the purchasing power of money is the real value of
Austerity Policy: Balancing Debt vs. Growth (Pros & Cons)
What's it: Austerity policy is an action by the government to reduce government debt. The government usually adopts it when debt is too high, hence weighing economic performance. High debt tends to be out of control. It is dangerous and
Supply-Side Policy: Growth Without Inflation (Tools, Pros & Cons)
What's it? Supply-side policy is a type of economic policy that focuses on aggregate supply. It seeks to increase an economy's productivity, efficiency, and potential capacity. Supply-side policies can involve government spending on education and
Precautionary Demand for Money: Why We Keep a Cash Cushion (Savings & Uncertainty)
Precautionary demand for money might sound complex, but it simply refers to the cash we hold as a buffer against unexpected events. Life throws curveballs, and having a financial safety net provides peace of mind. This demand for readily available
Reserve Requirement: Bank “Vault Cash” & Money Supply – Impacts
Reserve requirement is a regulation that commercial banks must follow. It dictates a specific portion of customer deposits that banks are obligated to hold onto as reserves. These reserves cannot be used for lending and function as a safety net for
Fiscal Policy Explained – A Guide for Students and Investors [Tools, Pros, Cons]
Fiscal policy plays a central role in shaping a nation's economic health. It's a set of government actions that directly influence the economy through adjustments to government spending and tax rates. This guide dives deep into the world of fiscal
Fiscal Stance Explained: How Gov’t Spending Affects Economy
Fiscal stance is a crucial concept in economics that refers to how a government uses its spending and tax policies to influence the overall health of the economy. In simpler terms, it's about how a government decides to allocate its budget to steer