What is Economic Policy?

This chapter on economic policy highlights the monetary circuit, a flow of income that constitutes a large part of our economy. Instruments of economic policymaking are introduced and discussed. Concepts include opportunity costs and affordability; policy instruments include the state budget and the Job Guarantee. The modern business cycle is examined in some detail and policy responses evaluated. The role of banks in the economy is described with a focus on their role in the real estate boom and bust that led to the Global Financial Crisis in 2008/09 examined.