Economic Stabilization

Economic stabilization refers to government efforts to reduce the fluctuations in a country's economic activity, such as inflation, unemployment, and growth. The goal is to smooth out booms and busts to promote steady, sustainable progress. Governments use tools like adjusting interest rates, changing tax policies, or increasing or decreasing public spending to influence the economy. By stabilizing economic conditions, they aim to prevent severe recessions or runaway inflation, ensuring that businesses and consumers can plan with more confidence and overall economic well-being is maintained.