Question

Distinguish among modern approaches to active policymaking.

Short answer

Political and social scientists have developed numerous theories, models, and approaches for analysing policy-making. Indeed, public officials have typically shown a greater talent and enthusiasm for theorising about public policy than for studying policy and the policy-making process.

Step-by-step solution

Step :1 Introduction 

All users of disparate fields nevertheless have a common reference point. It is mostly used to describe what the government does to meet the needs of the people.

Step :2 Explanation 

Firms may be hesitant to modify pricing in the face of demand changes, according to new Keynesian theories. As a result, the aggregate supply curve in the short run is horizontal, and changes in aggregate demand have the greatest impact on real GDP in the short run. Discretionary policy interventions can stabilise real GDP if prices and wages are sufficiently inflexible in the short run to provide an exploitable trade-off between inflation and real GDP.