Macroeconomic objectives means

What is macroeconomic objectives


This post explains about macroeconomic objectives.

Macro-Economic Objectives

The 5 macroeconomic objectives of an economy are:

Full employment: The country wishes to be as efficient as possible, and thus to have the maximum number of workers part of the work force under employment. An unemployment rate of 4–5% is considered full employment.

Low and sustained Inflation: A low rate of inflation around 2% helps spenders and investors plan their spending appropriately. The 2% target helps keep countries away from deflation (negative inflation where prices fall) and away from high levels of inflation where uncertainty leads to economic downfall.

Distribution of income: A government aims for as equal a distribution of income as possible, as that gives signs of a well-to-do economy where everyone is well off, and no sections of the economy are better off than the other.

Economic Growth: Economic growth in terms of increasing GDP year after year. The quantity of the factors of production could be increasing or the quality of the factors of production could be increasing, or both could be increasing at the same time to help achieve this economic growth.

Balance of Payments: A government aims to import around the same value of the goods it exports. This helps the country earn foreign currency, as well as provide a more diversified product choice for the citizens of the country. A country aims to neither be in a surplus (exports more than imports) nor in a deficit (imports more than exports).

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