2.6.1 Possible Macro Objectives

Question 1

What are the 7 possible macro objectives

Answer 1

1. Economic growth
2. Low + Stable inflation
3. Low unemployment
4. Balance of Payments equilibrium on current account
5. Balance of Gov budget
6. Protection of the environment
7. Greater income equality

Question 2

With Objective has become particularly important in COVID

Answer 2

distribution of national income

Question 3

Why will objectives differ from country to country

Answer 3

depending on stages of development, political priorities

So some objectives will have higher weighting when making policies

Question 4

How has the COVID-19 pandemic affected levels of GDP growth

Answer 4

the whole economy shrunk by a quarter

Aggregated demand (GDP market price) dropped -10.1%

Question 5

How has the Coronavirus affect Government borrowing

Answer 5

Government borrowing has been about 19% of GDP

The last time it was that high was WW2

Question 6

Apart from the Gini Coefficient, what is another way of showing income equality

Answer 6

The Lorenz curve was created by ranking households from poorest to richest and graphing the cumulative share of household income + cumulative share of households

Gini Curve = A/A+B