Chapter 25 Macroeconomic Aims of Government

Question 1

What are the macroeconomic aims of the govt (5)

Answer 1

Economic growth
- potential + actual growth

Low unemployment
- unemployment = waste of resource
- no income for people = low standard of living
- govt tax used for unemployed involved O.C

Price Stability
- Greater economic certainity
- Prevents country product from losing international competitiveness

Balance of Payments Stability
- If export > import, economic growth
- if import > export, country might go into debt

Redistribution of income
- Wealth inequality
- social injustice