Stabilization policy

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Stabilization policy (also known as anti-cyclical policy) - one of the branches of economic policy. Its purpose is to mitigate fluctuations in economic activity triggered by a change in business cycle phases.

Due to the type of instruments used within the stabilization policy, we distinguish fiscal policy (using tax rates and budgetary expenditures) and monetary policy (using open market operations).

The most frequently mentioned objectives of stabilization policy include: stabilizing prices, maintaining a high level of employment and balancing the balance of payments, and more generally - creating conditions conducive to economic growth.

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