POLI 357 Lecture 13: POLI 357 – Macroeconomic Policy – October 28
4 Nov 2016
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Document Summary
Poli 357 macroeconomic policy october 28, 2016. Deals with behavior of economy as a whole. Typically deals with issues such as employment, investment, inflation (the rate at which the price of goods and services increase), growth, and trade. Also refer to this as economic policy or economic stabilization policy. Explicit understanding that governments attempt to influence overall behavior of the economy. Microeconomics focuses on specific components of the economy. Monetary policy focuses on management of money. Objective is to keep inflation low, stable, and predictable. Two key monetary policy frameworks in canada: inflation control target and flexible interest rate. Inflation control target set jointly by federal government and bank of. Day to day control over monetary policy the purview of bank of. Fiscal policy involves the use of government finances to influence the overall behavior of the national economy. Details annual levels of spending, taxation, and borrowing. Spending and taxation are the two basic instruments of fiscal policy.
