Government Policies

Definition

Government policies are laws or principles set by governments that guide decisions and achieve rational outcomes. They can range from taxation rules to healthcare regulations.

Analogy

Consider government policies like rules in a board game; they dictate how the game (or society) operates - what moves are allowed, what aren't, and the consequences of breaking them.

Related terms

Public Policy: This is a system of laws, regulatory measures, courses of action, and funding priorities concerning a given topic promulgated by a governmental entity or its representatives.

Fiscal Policy: This refers to the use of government revenue collection (taxes) and expenditure (spending) to influence the economy.

Monetary Policy: This is the policy adopted by the monetary authority of a country that controls either the interest rate payable on very short-term borrowing or the money supply.