Unit 2 - Chapter 16 Flashcards
The objectives and instruments of macroeconomic policy.
1
Q
A policy instrument
A
A tool or set of tools used to try to achieve a policy objective.
2
Q
A policy objective
A
A target or goal that policy makers aim to ‘hit’.
3
Q
A policy conflict
A
Occurs when two policy objectives cannot both be achieved at the same time: the better the performance in achieving one objective, the worse the performance in achieving the other.
4
Q
Trade off between policy objectives
A
It may be impossible to achieve two or more objectives simultaneously. They aim for a satisfactory combination.
5
Q
A policy indicator
A
Provides information about what is happening in the economy.
