STABILIZATION POLICIES: Economic policies undertaken by government to counteract business cycle fluctuations and prevent high rates of unemployment and inflation. These are also termed counter-cyclical policies. To counter a business cycle contraction and high rates of unemployment, expansionary policies that promote increasing economic activity are appropriate. To counter an inflationary expansion, contractionary policies are recommended. See also | economic policies | fiscal policy | monetary policy | business cycle | unemployment | inflation | expansionary fiscal policy | expansionary monetary policy | contractionary fiscal policy | contractionary monetary policy |
