Question

A balanced federal budget and a balance of trade are considered secondary goals of macroeconomics, while growth in the standard of living (for example) is considered a primary goal. Why do you think that is so?

Answer 1

Standard of living is considered a primary goal in macroeconomics because according to our text, ''an economy’s macroeconomic health can be defined by a number of goals that include growth in the standard of living, low unemployment, and low inflation.” (15) That said, without growth in the standard of living our economy’s macroeconomic health would not be good. People need the standard of living to grow so that our households are able to keep up with inflation so we won’t be left behind and forced into poverty. That in its self would not just hurt the individual household but also our country as a whole.

As for the balanced federal budget and balance of trade, I wish it was considered a primary goal for everyone. I don’t really know why these are not a primary goal I can only speculate. I think that it is because they are things that no one individual can do anything about. These problems are so bad that it is to the point that it would take decades to try and fix whereas the standard of living is something that can be addressed much easier by our government. Our government, for some reason, can’t figure out how to spend less. Sometimes I start to think that they fail math class in school. I learned that you can’t spend more than you take in. Meaning if you only make $100 a week you can only spend up to $100 that week. It’s no wonder that they came up with Common Core. Our trade balance is almost impossible to fix right now as well because lately, it seems like we don’t manufacture anything here in America anymore. We need to start manufacturing again as we did in the early to the mid-20th century. That way we won’t be so reliant on having to buy other country’s products, and we can go back to exporting more and importing less. In the short term, this would cost consumers more, but in the long run, it will help us tremendously. Because then we wouldn’t have to keep putting up with China’s currency manipulation that they keep doing so that their products are cheaper! But again that would take a lot of people working together and a long time to catch up.