Government objectives Flashcards
What are the 5 main objectives of UK’s economy?
- economic growth
- Stable prices
- Low unemployment
- Balance of payments
- Fairer distributuion of income
economic growth = ?
economic growth = more economic activitiy
How is economic activity measured?
By GDP
What does an increase in GDP show?
more consumers and businesses buying more goods and services
What types of growth are there?
Short term(Next year) Long term(what UK economy needs for it to be strong in 20 years)
what does GDP stand for?
gross domestic product
What are price increases measured by?
inflation rate
what is the governments aim for inflation rate per year?
2%
What is considered full employment?
4% unemployment
exports should….
exports should be able to pay for imports
redistribution of….
redistribution of income from rich to poor
Why may high economic growth be desirable?
-lead to higher employment/workers and consumers get more money
Why may high economic growth be bad?
If workers earn more money and choose to spend their money it could lead to inflation
- leads to greater inequalities and higher imports as foreign goods would be made cheaper
Why is low economic rate good?
keeps inflation down
Why is low economic growth bad?
- leads to unemployment which widens inequality
- inequality damages long term growth as there are less opportunities avaliable for different sectors
