Stabilization policies are economic strategies implemented by governments or central banks to maintain or restore economic stability. These policies aim to control inflation, reduce unemployment, and promote sustainable growth. They often involve adjusting interest rates, changing government spending, or modifying tax policies to influence overall economic activity. There are two main types of stabilization policies: monetary policy and fiscal policy. Monetary policy involves managing the money supply and interest rates, while fiscal policy focuses on government spending and taxation. Both types work together to help stabilize the economy during periods of recession or inflation.