Explain the Government’s various macroeconomic objectives and their importance to UK economy. Is it possible for government to achieve all these objectives at the same time?
1. Define macro economics (Compare with micro)
2. Macroeconomic objectives:Assessing importance
List :(discuss individual)
1),Economic Growth
Advantages and disadvantages (and why)
(PPF) full use of resource
AD=C+I+G+X-M
2), Low inflation(Price stability)
Costs(Types of inflation)
3), Balance of payments Equilibrium/ surplus(exchange rate stability)
4), Low unemployment
Costs(causes of unemployment)
5), Redistribution of income &wealth (Economic social + political) ( Equity &fairness)
6), Regional policy
7), Productivity (Efficiency)
Research & development( innovation new technology processes) Training
3. “ conflict ”
Achieving objectives
(to do one objectives other will difficult)
4. Conclusion
Referencing
(UK economy)
figifacts
EXAM:
1,Section:
20 multiple choice questions
Short answer questions
4 aggregate demand– concept AD= C+I+G+X-M
Inflation– causes
Unemployment — types
Globalization — advantages
2 ESSAYS
1)Unemployment
2)Economic Growth
3)Inflation
4) Globalization international trade
The Essay on Unemployment and -economic Impact
Unemployment means lack of jobs even for those who are able and willing to work at the prevailing wage. The unemployment may be defined as the gap between the potential "full employments" and number of employed persons. Full employment is a condition of the national economy, where all or nearly all persons willing and able to work at the prevailing wages and working conditions are able to do so. ...
Notes:
Make
AD= C+I+G+X-M Firms More
AD=AS Efficient
At full employment level
All resources being used
If AD exceeds as = inflations Macro economic (more than) policy
AD is cess than AS = unemployment choice control AD
Or Influence AS
AD = C+I+G(+X-M)
C Lower taxes Economic Make Growth Firms more Lower Efficient Interest Rates Problem Bank Borrowing confidence *supply side * Credit cards policies
* Business—cycle
I Same AS C
Confidence
Important
See also supply side policies Macro Economic policy G choice control AD
Or
Influence AS
Inflation
Causes
Cost push
Prices of raw materials , labor , finance
Comportment parts rise . This increase is passed
on to consumer in higher prices
Demand Pull
Too much money chasing too few goods
Demand exceeds supply
Companies
Put up prices because they cannot increase supply in the short term In long term they will increase supply + price Will come down
Unemployment
Frictional
Demand deficient cyclical Not enough demand so companies lay off workers, Reduce shop production.
Causes / Types * Structural
* Long term decline in demand Occupational immobility: Eg. Steel .coal, shipbuilding To do with job need training * foreign competition (transferable skills) mis match between unemployed workers+jobs available Literacy ,customer care, skills Flexible numeracy,
Computer skills.
good experience
team worker
Geographical
Immobility
Moving to different parts of country
Technological unemployment
Workers replaced by new technology / machines
Increased productivity means fever workers need.
