Stimulus

Subject: Economy

Context:

The official estimates of GDP data for April-June revealing the extent of damage the pandemic on the economy which necessitates the second round of fiscal stimulus targeted at the poor.

Concept:

• Economic stimulus is action by the government to encourage private sector economic activity by engaging in targeted, expansionary monetary or fiscal policy based on the ideas of Keynesian economics.
• Economic stimulus is commonly employed during times of recession.
• Policy tools often used to implement economic stimulus include lowering interest rates, increasing government spending, and quantitative easing, to name a few.