2.6.1 Possible macroeconomic objectives

Question 1

Economic growth

Answer 1

The UK government aims to have sustainable long run economic growth
->Developed nations have an annual target rate of 2-3%

Question 2

Low unemployment

Answer 2

The UK government aims to have near full employment
-> The UK has an annual target of 4-5%

Question 3

Low and stable inflation

Answer 3

The UK has an annual target of 2%, measured by CPI

Question 4

Balance of payments equilibrium on current account

Answer 4

The UK government aims for exports = Imports.
-> The UK has traditionally run a small deficit.

Question 5

Balanced government budget

Answer 5

The UK government aims for expenditure = revenue
-> COVID 19 eroded the budget in 2020/21

Question 6

Protection of the environment

Answer 6

The UK governments aims to provide long run environmental stability.
->The Labour government have relaunched ambitions to net zero - carbon free energy by 2030.

Question 7

Greater income equality

Answer 7

The UK government aims to minimise the gap between the rich and poor to create a fairer society.
-> Most developed nations have a Gini target of 0.3-0.4.