Macroeconomic Aims of a Government

The government and policymakers of a country intervenes in the economy in order to achieve economic return, wrong stability, and low charge per unit of unemployment.

First and foremost, economic development can be defined as an increase in the countrys output over a effect of time. This means there is an increment in her productive content hence a rise in national income. A high economic growth is desirable as it represents an progress in the material standard of living of the society. A uprise real income per head brings about more and better fictitious character goods and services, which are available for consumptions of individuals. However, an improvement in the case of consumer benefit due to economic growth is highly doubtful if the growth is accompanied by undesirable side effects much(prenominal) as negative externalities, leisure time forgone or veritable(a) a dilution in the societys tradition & custom.

Through redistribution of income, economic growth can eliminate poverty. A higher output allows households to wassail more goods and services thus generating higher income and through the multiplier factor effect increases national income by folds. Besides that, the governments tax tax revenue will rise too, leading to more benefits for the poor such as education and training. This may even help cut short the problem of poverty.

The authority also highly regards sustaining a changeless price level as a primary heading of economic policy.



This is because inflation, defined as a sustained and immoderate increase in the general price level, could have offensive effects both socially and economically. A rising price level creates uncertainties and complicates decision-making, thus may hamper economic growth. Fluctuations in the level of prices makes information conveyed by prices harder to interpret. Consumer, firms, and the government may daring a tough time in allocating funds or resources for the future in an inflationary environment. Furthermore,

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