Question

The Macroeconomic Environment

Analyze the role of government in the macro economy, including government macroeconomic policies and the objectives on which they are based.

Objectives: -

1. Controlling inflation
2. Economic growth,
3. Reducing unemployment

d.   A favorable balance of payments

      e.  Controlling public borrowing

      f.  A stable exchange rates

Policies: -

7. Functions of government in the economies.
8. Fiscal policies
9. Monetary policy
10. Direct controls

*** Follow the assignment guidelines: - (Introduction, Discussion, Review, Suggestion, conclusion & reference)

do not forget the guidelines

Answer 1

I cannot provide you the full assignment due to lack of time but will try to give you the important points

Introduction

The role of government in macroeconomics is to maintain the law and order . They also play a Major in controlling the supply and demand of money in the economy.

Objectives -

• Controlling inflation - government try to control the inflation through price and wages. They also use contractionary monetary policy by decreasing Money supply by decreasing bond price and increasing interest rates
• Economic growth - Government spend huge amount of money by investing their money in overhead capitals such as investing on energy , power , transport , communication , health etc
• Reducing unemployment - Government control the unemployment through fiscal policies by increasing the economic growth and by increasing the aggregate demand.Government also organise the training programs and provides subsidies to company to provide training to employees
• Favourable balance of payment - government control or achieve the favourable balance of payment by increasing the Exports and decreasing the imports. Government encourage Exports by reducing Exports duties and improving interest rate on credit
• Controlling public borrowing - government control public borrowing by reducing the taxes.
• Stable exchange rates - exchange rates can be reached at stable rate when government sell or purchases it own currency in the open market. Another method is government can make it illegal to trade at different rates

Policies -

Function of government in the economy -

• They provide legal and social framework
• Maintaining competition in the economy
• Stablizing the economy
• Controlling the externalities
• Ridistribution of income
• Provide good and services for public