Question

What are the main macroeconomic policies used to achieve macroeconomic objectives?

Short answer

Fiscal, Monetary and Supply Side policies

Step-by-step solution

Macroeconomic policies

Governments utilize a combination of macroeconomic instruments such as fiscal policy, monetary policy, and supply-side policies to achieve the main macroeconomic objectives.

Fiscal policy, often associated with Keynesian economic theory, is a section of the government's overall economic policy which aims to achieve its economic objectives through the use of fiscal instruments such as taxation, public spending, and a budgetary position.

Monetary policy is the macroeconomic policy utilized to control and manage the flow of money supply and interest rates and is the main policy used by the government to achieve macroeconomic objectives like inflation, consumption, growth, and liquidity.

Supply-side policies, otherwise referred to as supply-side fiscal policies, are utilized with the objective in mind to improve, as well as: increase, the economy's productive potential, increase the economy's capacity to produce and supply goods and services by creating Incentives to work, encourage savings among households encouraging firms to invest in their capital assets encouraging households to invest in the stock market be entrepreneurial.