2.6.1: Possible Macroeconomic Objectives

Question 1

What are the 4 main macroeconomic objectives?

Answer 1

-Economic Growth: UK long run trend is 2.5%.
-Low Unemployment: UK aims for an unemployment rate of 3%.
-Low and Stable Rate of Inflation: UK aims for an inflation rate of 2%.
-Balance of Payments Equilibrium on Current Account: governments try to avoid a large deficit.

Question 2

What are 3 additional macroeconomic objectives?

Answer 2

-Balanced Government Budget: this ensures the government keeps control of state borrowing.
-Protection of the Environment: sustainable use of resources.
-Greater Income Equality: generally associated with a fairer society.