The Objectives Of Government Economic Policy

Question 1

Macroeconomics

Answer 1

Macroeconomics involves the study of the the whole economy at the aggregate level

Question 2

Policy objectives

Answer 2

A target or goal that-policy makers aim to hit

Question 3

Short term economic growth

Answer 3

Growth of real output resulting from using idle resources, including labour, thereby taking up the slack in the economy

Question 4

Long term economic growth

Answer 4

An increase in the economy’s potential level of real output, and an outward shift of the economy’s production possibility curve

Question 5

Gross Domestic Product (GDP)

Answer 5

The sum of all goods and services, or level of output, produced in the economy over a period of time, e.g. one year

Question 6

Real GDP

Answer 6

A measure of all the goods and services produced in an economy, adjusted for price changes or inflation. The adjustment transforms changes in nominal GDP, which is measured in money terms into a measure that reflects changes in the total output of the economy