Bachelor of General Studies (BGS) Degree Practice Exam

What phrase best describes the government's approach to managing economic stability?

1. Market deregulation

2. Fiscal control

3. Economic intervention

4. Non-interference

The correct answer is: Economic intervention

The phrase "economic intervention" best describes the government's approach to managing economic stability because it encompasses the active measures that governments take to influence the economy. This can include tools such as adjusting interest rates, modifying tax policies, and implementing social welfare programs to stabilize the economy during fluctuations, such as recessions or inflation. Economic intervention aims to create a stable economic environment, promote growth, and mitigate negative impacts on the population. In the context of the choices presented, this approach recognizes that the government plays a vital role in addressing economic challenges rather than leaving the economy entirely to market forces. By intervening, the government can help ensure a balanced economic framework that supports employment, consumer confidence, and overall economic health.