What is the main government objectives to maximize economic growth?

There are many government objectives that maximize economic growth. Most common ones are Fiscal Policy, Monetary policy and supply side policy. Fiscal Policy is the decisions made by the government on spending, borrowing and taxation and government can take the expansionary fiscal policy approach in order to increase economics growth. Expansionary fiscal policy is when government increases government spending and reduces taxation. As government spends more and reduces taxes, consumers will have more income. As consumers have more income they will spend more and as a result this will lead to increase in output of the economy thus leading to increase in economic growth. But in the long run it could lead to crowding out private sector.
Another approach government use is monetary policy. Monetary policy is about changing the interest rate, quantitative easing (printing money) and the money supply. If government lowers the interest rates this can lead to rise in foreign direct investment. As investment increases this will lead to more job openings and unemployment will decrease. Therefore consumers will have more income which will lead to increase in output thus leading to economic growth. Lastly the government can use supply side policy and this is providing skills and training to people who are unemployed to make sure they have necessary skills to be employed and therefore as unemployment decreases consumers will spend more and therefore leading to economic growth.

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Answered by Gokhan E. Economics tutor

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