Question

State the three key objectives of macroeconomics

Answer 1

Ans. The three key objectives of macroeconomics are as under:

1. Real Economic Growth: This is stable and sustainable economic growth and development that is non-inflationary in the long run. The most common way to define growth is the increase in a country’s Gross Domestic Product. The objective of the central bank and government with their policies would be to increase economic growth without a rise in the rate of inflation.
2. Low Inflation & Unemployment Rate: To define Inflation, it's the continuous increase within the price index. The rate of inflation is the change in inflation over a period. Central banks would really like to stay the expansion of the rate at which prices increase at low rates. The scenario of full employment occurs when labor is fully employed in productive work. A person is taken into account to be unemployed if he doesn’t have employment and is actively trying to find it. A lower rate of unemployment means that the economy is more productive. This objective means to have many those that want to use are literally employed.
3. Equilibrium in Balance of Payments: Equilibrium in Balance of Payments implies that a country’s exports or imports shouldn't be much larger than its imports or exports. Having an oversized balance of payments deficit or surplus isn't beneficial for the economy.