Economic theories influence political decisions by providing frameworks for understanding how markets operate and how policies can affect economic outcomes. For instance, Keynesian economics advocates for government intervention to stimulate demand during recessions, influencing fiscal policies aimed at boosting growth. Conversely, neoliberal theories emphasize market deregulation and minimal government intervention, shaping policies that promote free markets. Policymakers often draw on these economic models to justify decisions on taxation, spending, and trade. Consequently, political decisions are frequently molded by the prevailing economic theories, impacting everything from social welfare programs to international trade agreements.