Th2.1: Macroeconomic Objectives

Question 1

Governments tend to have four main objectives, these being:

Answer 1

low unemployment
low and stable inflation
economic growth at a similar rate to other economies
balance of payments equilibrium - including current account balance

Question 2

What can affect achieving a balance of payments equilbrium?

Answer 2

achieving other aims

Question 3

What does high economic growth tend to mean in terms of the current account?

Answer 3

that the current account becomes a deficit as there is increased imports due to increased demand - it is times of high unemployment e.t.c that the current account deficit improves

Question 4

Governments tend to want export led growth - how would this affect the four key objectives?

Answer 4

cause economic growth
increase employment
improve current account balance
however would increase inflation