GOVERNMENT MACROECONOMIC POLICY OBJECTIVES Flashcards
What are the four macro -economic objectives of government
• Sustainable economic growth: The government aims for steady increases in GDP each year because more goods & services produced means that people must be consuming more goods and have higher incomes and so have a better quality of life.
• Low unemployment : Government gains tax revenue and spend less on unemployment benefits. Therefore, they can inject more money in improving public goods and services
• Low inflation: If price rises are less than wage rises then people become richer and so have better living standards
• Equilibrium in the current account of the balance of payments:
indicates how competitive UK goods and services are. The UK has a deficit in goods and overall deficit and so indicates a lack of international competitiveness.
