Macroeconomics: Theory and Policy

24

Macroeconomic Policies

After studying this topic, you should be able to understand

• Macroeconomic policy is the action taken by the government to achieve the macroeconomic objectives of the economy.

• Monetary policy is an operation by the monetary authority where as fiscal policy is an operation by the government.

• The objectives of macroeconomic policy differ from country to country.

• The objectives of macroeconomic policy are determined by the government keeping in mind the economic and social needs of the country.

• The targets are the variables, which should be controlled to achieve the macroeconomic objectives.

INTRODUCTION

At many points, in the course of this book, we have observed that the right combination of fiscal and monetary policies ...