Possible Macro-economic Objectives

Question 1

Balanced growth

Answer 1

In macroeconomics, balanced growth occurs when output and the capital stock grow at the same rate. Also refers to balanced expansion of components of aggregate demand.

Question 2

Budget balance

Answer 2

The annual balance between government spending and tax revenues. When G>T, there is a budget deficit and when G

Question 3

Current account balance

Answer 3

When the outflows on the current account are exactly equal to the inflows.

Question 4

Environmental economics

Answer 4

Environmental economics studies the impact of environmental policies and devises solutions to problems resulting from them. The approach can either be prescriptive or incentive-based.

Question 5

Income distribution

Answer 5

Income distribution is how income is divided up among all the citizens in a country. The most common measure of income distribution is the Gini Coefficient.

Question 6

Income inequality

Answer 6

The degree to which income is distributed unequally in an economy or population; income inequality can be illustrated using a Lorenz Curve and measured using the Gini coefficient.

Question 7

Price stability

Answer 7

Occurs when there is a low positive inflation rate of between 1-3% and price changes that do occur have little impact on day-to-day decisions of people and businesses.

Question 8

Sustainable growth

Answer 8

Growth that meets the needs of the present without compromising the ability of future generations to meet their own needs. Sustainable growth can continue without damage to the environment, or the exhaustion of nonrenewable resources.

Question 9

Unemployment rate

Answer 9

The unemployment rate is the proportion of the economically active population who are unemployed.