9.1 The Objectives of Government Economic Policy

What are the 4 main macroeconomic objectives of government policy

• Economic growth

• Stable inflation

• Low unemployment

• Stable balance of payments on the current account

What additional macroeconomic objectives might government pursure

• Balanced Budget

• Environmental stability

• Equitable distribution of income

Why might conflicts arise when pursuing macroeconomic objectives

Conflicts may arise because achieving one macroeconomic objective can negatively impact another, such as prioritizing economic growth which may lead to higher inflation or income inequality.

Does the importance of macroeconomic objectives remain constant over time

No, the emphasis on macroeconomic objectives can change due to economic conditions and policy priorities