MACRO OBJECTIVES OF GOV ECONPLUSDAL

Question 1

GROWTH OBJECTIVE

Answer 1

Strong, sustained, sustainable

(Growth is measure of incomes + living standards)
Sustainable growth: way in which economy growing today can continue over time (without excessive inflationary pressures/environmental damage)

Question 2

UNEMPLOYMENT OBJECTIVE

Answer 2

Low unemployment, full employment

(Sign of strongly performing economy)

Question 3

INFLATION OBJECTIVE

Answer 3

Low + stable, in UK target is 2% (+/-1%)

Inflation: Rate of growth of prices in economy
Hyperinflation + deflation can ruin economy

Question 4

TRADE OBJECTIVE

Answer 4

Balanced
balanced trade between value of exports + value of imports of goods/services

Trade deficit: where value of imports exceeds value of exports
Trade surplus: value of exports exceeds value of imports
Both can have negative consequences (deficit is worse tho)

Question 5

DISTRIBUTION OF INCOME OBJECTIVE

Answer 5

‘Fair’
- no exact figure, normative consideration

Question 6

Use TIGERS to help remember indicators

Answer 6

Trade
Inflation
Growth
Employment
Redistribution of Income
Stability (if 4 TIGE objectives met at same time, stable economy)

Question 7

NON-CORE OBJECTIVES

Answer 7

Sound gov finances (making sure economy can pay its way in future)
Environmental sustainability
Productivity growth