4.2.1.1 Macroeconomic Objectives Flashcards
(10 cards)
1
Q
4 Main Economic Objectives
A
- Economic Growth
- Unemployment
- Inflation
- Balance of Payments
2
Q
Economic Growth Objective
A
“Rate of change of a country’s output”, key measure is GDP
Goal of High and Sustainable Economic Growth
3
Q
Benefits of Economic Growth
A
- Job creation
- Rising Incomes
- Improved Standards of Living
- Improved International Competitiveness
- Improved Business Confidence
- Improved Consumer Confidence
- Lower G on Benefits
- Tax revenues will increase allowing the government to reinvest
4
Q
Low Unemployment Objective
A
Actively seeking work but unable to find a job.
Unemployment is a waste of resources and an indicator of poor economic performance.
Full Employment is unachievable, as there will always be Frictional Unemployment
Goal of around 3%
5
Q
Benefits of Low Unemployment
A
- Higher Consumption
- Improved Standards of Living
- Higher Tax Revenue
- Lower G on Unemployment Benefits
- Improved Productivity
- Reduced Poverty
- Social Benefits
6
Q
Low Inflation Objective
A
- The rate of change of average prices in an economy.
- Key Indicator is CPI or CPIH
- Target of 2% is independent of the UK government.
- Target for price stability is for it to be maintained within + or - 1% of the target.
7
Q
Balanced Balance of Payments Objective
A
- Measures the UK’s economic activities with other countries.
- The UK has been in a significant deficit on the current account.
8
Q
Austerity Definition
A
Cutting government spending to balance the budget instead of increasing revenue
9
Q
Protection of the Environment
A
- Global warming and climate change high on the political agenda.
- The government look to develop a sustainable future.
10
Q
Greater Income Inequality
A
- Income inequality is regarded as socially unacceptable as a society people believe that all citizens should be able to access fair wages.
