Which concept involves actions taken to manage the economy's overall performance regarding GDP and inflation?

The correct choice focuses on a concept directly related to managing the money supply and interest rates in the economy to influence overall performance, specifically targeting GDP growth and inflation control. This concept is known as monetary policy, which is typically implemented by a country's central bank.

Monetary policy involves adjusting the quantity of money in circulation and modulating interest rates to create favorable economic conditions. For instance, when a central bank lowers interest rates, it encourages borrowing and investment, which can stimulate economic growth and increase GDP. Conversely, if inflation is high, a central bank may raise interest rates to slow down economic activity and keep prices stable. This balance between fostering growth and controlling inflation is central to effective monetary policy.

In contrast, other concepts mentioned play different roles in economic management. Fiscal policy, for instance, pertains to the government's use of spending and taxation to influence the economy. Trade policy deals with international trade regulations and tariffs, affecting how countries interact economically on a global scale. Economic policy is a broader term that encompasses all actions taken to influence economic conditions, including both fiscal and monetary policy, but it is not as specific as monetary policy in terms of directly managing GDP and inflation.

Thus, the focus on controlling the money supply and interest rates to manage overall