Macroeconomic objectives

Question 1

Sustained increase in real economic growth

Answer 1

-sustained rate of growth can be maintained without creating other significant economic problems
-Measured through real GDP statistics
-long run tred of 2.5%

Question 2

Low unemployment

Answer 2

-Unemployment levels should not reach levels that seriously hinder economic output - work should be productive
-Measured by unemployment rate
-Around 3% aim to account for frictional unemployment

Question 3

Low and stable inflation

Answer 3

-The increase in the price of goods and services in a given year does not fall lower than 1% or higher than or higher than 3%
-Target of 2 %
-Measured by CPI
-Provides stability for firms and consumers so they can make long run decisions

Question 4

Balanced government budget

Answer 4

When government revenues and income are roughly the same
-Measured by financial statements of her majestys trust
-Control state borrowing so debt does not get too high
-Cheaper borrowing in future
-Repayments not too high

Question 5

Balance of payments equilibrium on current account

Answer 5

-When the value of exports are similar to the value of imports
-Investment incomes and net transfers put the current close to zero (no deficit or surplus)
-Sustainably financed current acc is important for long-term growth

Question 6

Greater income equality

Answer 6

-When lower income demographics do not see great disparity between their levels of income and that of high earners
-Gini coefficient

Question 7

Environmental protection

Answer 7

-Ensuring the world’s climate and environment is sustainable
-Resources arent exploited
-Future generations can access resources