2.6.1 Possible macroeconomic objectives

Question 1

Balanced growth / Balanced expansion of components of aggregate demand

Answer 1

when output and the capital stock grow at fine same rate

Question 2

Budget balance

Answer 2

The annual balance between government spending and tax revenues

Question 3

Budget deficit

Answer 3

when government spending is greater than tax revenue

Question 4

Budget surplus

Answer 4

when tax revenue is greater than government spending

Question 5

Current account balance

Answer 5

when the outflows on the current account are exactly equal to the inflows

Question 6

Environmental economics

Answer 6

studied the impact of environmental policies and devises solutions to problems resulting from them. the approach can either be prescriptive-based or incentive-based

Question 7

Income distribution

Answer 7

how income is divided up among all the citizens in a country

Question 8

Income inequality

Answer 8

The degree to which income is distributed unequally in an economy or population

Question 9

Price stability

Answer 9

occurs when there is a low positive inflation rate between 1-3% and price changes that do occur have little impact on day-to-day decisions of people and businesses

Question 10

Sustainable growth

Answer 10

growth that meets the needs of the present without compromising the ability of future generations to meet their own needs

Question 11

Unemployment rate

Answer 11

the proportion of economically active population who are unemployed