Macroeconomics is the study of the economy as a whole, which looks at economic growth, unemployment and inflation. (Dobson and Palfreman, 1999) Government macroeconomics objectives can dividend into main objectives and additional objectives.
There are four main objectives of macroeconomic policy and they are a long-term growth of the economy, a low and stable inflation, a low level of unemployment rate and balance the current account and maintain a stable exchange rate. Economics growth can be shown as an outward shift of the production possibilities frontier. Real gross domestic product or real output means in periods of a general upward or downward movement of prices in an economy. A sustainable economic growth can keep a lower inflation and reducing the environment impact of economic growth. Besides of this, inflation is a sustained upward movement in the average level of prices, which a decrease in the purchasing power of money. UK Government’s inflation target of 2% for the consumer price index. (Bank of England, 2016) This makes a stable and low inflation. For a low level of unemployment rate, government wants to achieve the people who able and wish to find a meaningful work, even...
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...essions. Fiscal policy has its initial impact in the goods markets, then monetary policy has its initial impact mainly in the assets markets, which both effect on both level of output and interest rates. (R. Dornbusch et al., 2008)
In every economy, there are 4 main and 4 additional objectives of government macroeconomics objectives. We can point out that the objectives have their own conflicts which difficult to carry it out at the same time between government macroeconomic objectives. Therefore, government use different policies to minimize the conflict.
In my opinion, the most important aspect is that government should consider the importance of the government macroeconomic objectives goals and which government should priority first. This will be an easier way for government to allocate the resources and help to focus the government macroeconomic objectives goals.
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