What does public borrowing and spending primarily relate to?

Public borrowing and spending primarily relate to fiscal policy, which involves government decisions about taxation and expenditure. When a government borrows money, it is often to fund public spending initiatives, such as infrastructure projects, education, and healthcare, with the aim of stimulating economic growth or addressing societal needs. This activity directly impacts the economy by influencing levels of demand, employment, and overall economic performance.

Fiscal policy sets the framework for how money is raised (through taxes) and spent (through public services and investments), making it a crucial tool for governments to manage their economies. Unlike monetary policy, which deals with the supply of money and interest rates, fiscal policy focuses specifically on government budgets and spending programs.

Trade policy addresses the international exchange of goods and services, while regulatory policy is concerned with the rules that govern various sectors of the economy. These areas of policy are distinct from fiscal policy, which centers specifically on public finance and its role in economic management.