Government intervention refers to actions taken by authorities, such as regulations or policies, aimed at influencing economic activity within an economy.
Think of government intervention as traffic rules on a busy road. Just like traffic rules help regulate vehicles' movement for safety, government intervention aims to guide economic activities for stability or desired outcomes.
Fiscal Policy: The use of government spending and taxation policies to influence economic conditions.
Monetary Policy: Actions taken by the central bank to control the money supply and interest rates to achieve economic goals.
Price Controls: Government-imposed limits on prices, such as price ceilings or price floors.
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