Stabilizing an Unstable Economy

Stabilizing an unstable economy involves implementing policies to reduce excessive fluctuations like high inflation, unemployment, or recession. Governments and central banks use tools such as adjusting interest rates, changing government spending, or modifying taxes to influence spending and investment. The goal is to create steady growth, control inflation, and maintain employment levels. By balancing these factors, policymakers aim to prevent economic extremes—like deep recessions or runaway inflation—and promote a healthier, more predictable economic environment for individuals and businesses.