Answer:
The various government actions that are important in macroeconomics are;
1. Controlling inflation
2. Boosting GDP
Step-by-step explanation:
Macroeconomics is the branch of economics that deals with large-scale economic factors for example; inflation, rate of economic growth, price level, national income, gross domestic product and employment rates. Since macroeconomics covers national economic factors, governments can play a major role in controlling these factors. There are various examples of how government action are important in macroeconomics, namely;
1. Controlling inflation
Inflation occurs when there is a huge supply of money in the market. This causes most people to feel like they have a lot of disposable income to buy, making people to spend a lot. The spending causes a huge demand for goods and supply. When the demand for goods and services increases, the price of those goods also increases causing inflation. Governments utilize contractionary monetary policy to reduce money supply in the economy.
2. Boosting GDP
The Gross Domestic Product is the amount of goods and services produced in a given economy at a certain time. When the GDP is low, it means the production is also low. Governments can utilize expansionary policies to increase money supply thus increasing spending. When spending is increased, there is a huge demand for goods and services which triggers the economy to increase the production of goods and services.