Economic policy refers to the actions the government takes to influence the economy. It covers anything to do with finance, such as deciding tax rates (fiscal policy) and implementing interest rates (monetary policy).
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Economic policy refers to the actions the government takes to influence the economy.
Economic policy goes hand in hand with social policy. Social policy refers to the actions the government takes to influence the well-being or living conditions of the people (e.g. access to education and healthcare).
Governments must balance their economic and social policies, as their economic resources will have an impact on how much of their social policy they can carry out.
There are many different types of economic policy. As we learned in chapter 29, limited resources impact the choices that are made in an economy. When a government takes office it must look at the country’s financial situation and decide what type of economic policy to pursue.
NATIONAL RECOVERY PLAN
In chapter 34, we learned about the Celtic Tiger and the economic crisis that followed. To save the Irish economy from collapse, the European Union and the International Monetary Fund (IMF) provided the country with a bailout of €67.5 billion in November 2010. This money would have to be paid back with interest over the coming years.
The government responded to the financial crisis with an action plan to reduce the budget deficit and boost economic growth. This was the National Recovery Plan 2011–2014.
