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MACRO ECON Y1 > MAIN OBJECTIVES OF GOV > Flashcards

MAIN OBJECTIVES OF GOV Flashcards

1
Q

MACROECONOMICS IS ALL ABOUT

A

THE performance of an economy

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2
Q

what dop core indicators tellus

A

tell us about how the econ is doing

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3
Q

what are the 4 main objectives of government macroeconomic policy

A

economic (growth)

price stability (inflation)

minimising (unemployment)

a stable balance of payments on current account.(trade

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4
Q

state the 5 core indicators

A

growth

unemployment

inflation

trade

distribution of income

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5
Q

what does growth indicate

A

income living standards

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6
Q

what dpes unemployment indicate and tell us about

A

the jobless

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7
Q

what does inflation indicate

A

the rate of growth of prices

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8
Q

what does trade indicate

A

value of imports compared to exports

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9
Q

what does distribution of income indicate and how is this different to (economic) growth

A

not just whether income’s are rising but how theyre distributed across households in teh economy

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10
Q

what does having specifc macro economic objectives allows us to do

A

see and measure whether theyre being met

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11
Q

what is the OBJECTIVE for growth

3s’s

A

strong

sustained

sustainable

growth

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12
Q

why doe we want growth to be stroing and high

A

its a measure of income lviing standards so ahving high and strong growth means strong and hihg incomes living standards

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13
Q

why do we want growht to be sustained and sustainable

A

we want the way were groiwng to continue overtime

so

without excessive inflationary pressures

without excess environmentl damage

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14
Q

what is the OBJECTIVE for unemploymenr

A

low/full unemployment

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15
Q

what does low/full unemployment show

A

the economy is performing strongly

as they are making use of the labour FOP therefore likely to have more output and therfore growth

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16
Q

what is the OBJECTIVE for inflation

A

low and stable

2% (plus or minus 1) - all econ have a target around this figure

17
Q

Why is 0 inflation not desirable

3 points

A

the costs of zero inflation are likely to be large and permanent:

a continuing loss of 1 to 3 percent of GDP a year,

with correspondingly higher unemployment rates.

18
Q

why is lwo and stable inflation important

A

hyperinflation / hyperdeflation can ruin an economy

as impact living standards and growth

19
Q

what is the goal(OBJECTIVE) for trade

A

balanced trade

20
Q

what does balanced trade mean

A

balance between value of exports and improts

21
Q

why do we want baalnced trade

A

trade deficits and trade surpluses can be bad

trade (surpluses are less bad)

22
Q

what is the goal for distribution of income

A

FAIR distribution of income

23
Q

describe whats special about the figure for fair dsitribution of incom

A

no eocn has prrecise figure -its someone’s opinion

24
Q

as the fair distribution of income is someones opinion what type of consideration is it

A

NORMATIVE

25
Q

As ‘fair’ ditribution of income is a normative consideration gow can we evalaute , what can we say

!!!!!

A

as its someones opinion is dependent of the governemtn at teh time

therfore obj of fair is opinionated

26
Q

what acronmy can we sue to sum up gov obj

A

Trade

Inflation

Growth

(u)Employment

Redistribution of Income

Stability

27
Q

why is stability importan

A

macro economics is all about achieving economic stability

28
Q

What s macroeconomic stability

A

Trade
Inflation
Growth
Employment

all being met at the same time

29
Q

What are the big daddys

A

trade

growth

employment

stable inflaiton (price stability)

30
Q

what happens if im able to meet the big daddys at the same time

A

i get a stable economy

31
Q

what are other non core macro obj

3

A

sound gov finances

environmental sustainability

productivity growth

32
Q

what is sound gov finances about

A

making sure the economy can pay its way in the future

33
Q

whatis environemntal suataibiltuy about

2 marks

A

not destroying the environment

minimally impacting the enviro

34
Q

what do we want to ensure about productivity growth

A

rising as the years go on

(proably to remain comp and strong as the years go by, tech and stuff + otehr countries get more productive and better casue of new tech and systems & ways of doing things)

35
Q

what signficant about the importance attached to the different objectives

A

they change overtime

  • maybe the gov meets growth and low unemployment but redistirbution of icnome is not right i.e in one area

MACRO ECON Y1 (5 decks)

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