Demand management policies
These policies are intended to increase aggregate demand and, therefore the equilibrium level of national income. They are sometimes called fiscal and monetary policies. The principal policy instruments are:
- Supporting declining industries with public funds
- Instituting proper demand management policies that increase aggregate demand including exploiting foreign and regional export markets. This can be done by increasing government expenditure, cutting taxation or expanding the money supply.
- Promoting the location of new industries in rural areas which will require an improvement of rural infrastructure.