How Government's Manage the Economy?

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Libertine

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I've got an Economics exam on Tuesday and I'm currently running through past papers. One of the questions is:

'Outline the ways in which Governments seek to manage the economy and thereby influence the external business environment'.

I'm a little confused on this - are they asking for an answer referring to Demand and Supply side policy and how it affects the business cycle (Recession and Booms)? I'm struggling to think of any other way on how to answer this question...!
 
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