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Stabilization policy
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==Business cycle stabilization== “Stabilization” can refer to correcting the normal behavior of the [[business cycle]], thus enhancing [[economic stability]]. In this case, the term generally refers to [[demand management]] by [[monetary policy|monetary]] and [[fiscal policy]] to reduce normal fluctuations and output, sometimes referred to as "keeping the economy on an even keel." The policy changes in these circumstances are usually [[countercyclical]], compensating for the predicted changes in employment and output, to increase short-run and medium run welfare.
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