Macro 7

Question 1

What is the target for steady economic growth ?

Answer 1

Target is 3% GDP growth every year as growth is believed to improve standards of living

Question 2

WHat is the aim for unemployment ?

Answer 2

Natural rate of unemployment is 4% - the government aims to be as close to this as possible. If more people are employed then the economy will be more active and we will see a rise in AD and incomes

Question 3

What is the target for inflation ?

Answer 3

Target is 2% - we use the monetary policy tools to help achieve this target

Question 4

What are some factors that can affect economic growth in the short run ?

Answer 4

Changes in interest rates set by central bank , Fiscal policy changes in government spending and taxation ,Commodity prices such as oil gas and good

Question 5

What does the spiced acronym stand for ?

Answer 5

S-trong
P-ound
I-imports
C-weak
E-xports
D-ear

Question 6

What is the primary cause in the long run for growth ?

Answer 6

The primary cause of growth is an increase in the quality or quantity of factors of production, or technological advancements.