THE ROLE OF THE STATE IN REGULATING THE RELATIONSHIP BETWEEN MONEY SUPPLY, INFLATION, AND ECONOMIC ACTIVITY

Abstract

This article examines the theoretical foundations of regulating the economy through the state budget and taxation, their significance in influencing economic processes, and their role in the context of a modern market economy. It highlights the functions of the state budget in ensuring the country's socio-economic development, stimulating economic growth, improving public welfare, and supporting strategic sectors of the economy. Furthermore, the study discusses the mechanisms of tax policy in promoting entrepreneurial activity, improving the investment climate, redistributing income, and maintaining macroeconomic stability. The article argues that the effective use of fiscal policy instruments by the government is a key factor in ensuring sustainable economic development and enhancing the efficient functioning of market mechanisms