Economic policy refers to the guiding principles and measures formulated by the state or government to solve economic problems in order to improve social and economic welfare. It is the government's conscious intervention in economic activities in order to achieve certain economic goals. Therefore, the formulation of any economic policy is based on certain economic goals. According to the explanation of western economics, there are probably four goals of macroeconomic policy: full employment, price stability, sustained and balanced economic growth and balance of payments.

Fiscal policy is one of the main policies of state intervention in economy. The general meaning of fiscal policy is: in order to promote the improvement of employment level, reduce economic fluctuations, prevent inflation and achieve stable growth, the choice of government expenditure, taxation and borrowing levels, or the decision of government revenue and expenditure levels.

The central bank controls the money supply and adjusts the interest rate through the money supply, thus affecting investment and the whole economy to achieve certain economic goals. This is the monetary policy. Monetary policy, like fiscal policy, can also adjust national income, achieve the goal of stable prices and full employment, and achieve stable economic growth. The difference is that fiscal policy directly affects the scale of total demand, without intermediate variables, while monetary policy affects total demand through the change of interest rate, so it plays an indirect role.