Macro Economic Objectives

     Macro-Economic Objectives:

·         Economic Growth: this looks at how fast national income rises over a period of time. Governments want economic growth as it adds to national income and gives a better standard of living. A feature of high growth is high consumer spending and this is as a result of rising prices.

·         Full Employment: Governments want to achieve full employment. This is not necessarily no unemployment, it just refers to those actively seeking employment. If unemployment falls too low then income will go down and consumption will decrease causing prices to rise.

·         Stable Prices: It is in the government’s best interest to keep prices generally stable. A period where there is continual increase in prices is called inflation. The UK’s current desired rate of inflation is 2%.

·         Balance of Payments: This refers to the financial transactions between the UK and all other foreign countries over a period of time. The government want the exports to be equal to the imports. Currently in the UK, there is budget deficit.