Stabilization policy

Stabilization policy,

Definition of Stabilization policy:

  1. Stabilization policy is a strategy enacted by a government or its central bank that is aimed at maintaining a healthy level of economic growth and minimal price changes. Sustaining a stabilization policy requires monitoring the business cycle and adjusting benchmark interest rates as needed to control abrupt changes in demand.

  2. Monetary policy aimed at reducing fluctuations in inflation and unemployment levels, while simultaneously maximizing national income. Such policies (out of favor in the era of globalization) attempt to expand demand when unemployment is high, and to curtail demand when inflation accelerates.

  3. In the language of business news, a stabilization policy is designed to prevent the economy from excessive "over-heating" or "slowing down.".

How to use Stabilization policy in a sentence?

  1. Stabilization policy seeks to keep an economy on an even keel by increasing or decreasing interest rates as needed.
  2. Interest rates are raised to discourage borrowing to spend and lowered to boost borrowing to spend.
  3. The intended result is an economy that is cushioned from the effects of wild swings in demand.

Meaning of Stabilization policy & Stabilization policy Definition