Government Macroeconomic Policy
A central issue in macroeconomics is whether or not markets, left alone, automatically bring about long run economic equilibrium. If the free operation of market forces eventually resulted in a full employment level of national income with stable prices and economic growth, there would be no need for government intervention in the macro economy - no need for fiscal monetary exchange rate and supply side policies. The reality is that all governments intervene through their macroeconomic policies in a bid to achieve certain policy objectives and improve the performance of the economy.
Targets, instruments and goals of macroeconomic policy
Policy instruments are the main options available to a government for managing the economy. There are broadly speaking three main policy groups: