What are the government intervention policies which stablize the economy?

Question

and what are two economic theories?

Answer 1

fiscal policies are tax and spending

monetary are using prime rate, open mkt operations, setting the ratio rate

Answer 2

I've been reading Alan Greenspans book on this topic and it's very interesting....

In general, intervention is bad for the economy as a whole, but in certain circumstances, government might bail out major banks to prevent economic devistation like in the recent credit crises....

Subsidies and other price controls however, harm the economy overall because they encourage inefficiencies, and prevent trade...

Answer 3

the government has the central control over the nation so their intervention will stabilize the economy

for example: increase tax

                      introduce money in low sectors and vice versa

                      increase the rate of interest etc