Category Archives: Chapter 30: Macroeconomic Objectives

Macroeconomic Objectives

What do governments want to achieve? (Macroeconomic Objectives)

  • Economic Growth
    • The Government wants to raise levels of GDP so that citizens will have a higher standard of living and have more things
  • Low-price Inflation
    • When price goes up, the value of money will decrease
  • Low Unemployment
  • Avoid Trade Deficits
    • When you have trade deficits, you cannot buy more than you sell
  • Redistribution of Income
    • Taxation is often used to redistribute income (e.g. higher taxes for the richer)
    • You don’t want a country where 1% of people are incredibly rich while 99% are poverty stricken because it tampers with the GDP per Capita.
  • Sustaining the Environment/ Sustainability