Generally,
all societies seek to achieve some macroeconomic goals. Four basic
macroeconomic goals are identified in the economic literature. They are:
all societies seek to achieve some macroeconomic goals. Four basic
macroeconomic goals are identified in the economic literature. They are:
·
The attainment of the highest
possible rate of resources utilization. This is often called the attainment of
full employment of resources.
The attainment of the highest
possible rate of resources utilization. This is often called the attainment of
full employment of resources.
·
The attainment of a stable rate of
growth of output (potential and actual). Sometimes this is defined in terms of
the rate of growth of output or income per person (i.e. per capital income).
The attainment of a stable rate of
growth of output (potential and actual). Sometimes this is defined in terms of
the rate of growth of output or income per person (i.e. per capital income).
·
Some reasonable measure of stability
in the price level.
Some reasonable measure of stability
in the price level.
·
Attainment of external
(balance-of-payment) equilibrium.
Attainment of external
(balance-of-payment) equilibrium.
To
these four can be added other objectives such as attaining to some level of
equality in income distribution, economic security, economic freedom etc. the
‘new’ thinking introduced by macroeconomics is that the market system in itself
may not achieve these objectives (whether individually or collectively). Hence,
there is the need for government to set up institutions and adopt policies that
will indirectly influence the economy (the level of economic activities) or put
differently, the pattern of resource allocation in the society. Such actions
are judged a needed assistance for the effective functioning of the price
system.
these four can be added other objectives such as attaining to some level of
equality in income distribution, economic security, economic freedom etc. the
‘new’ thinking introduced by macroeconomics is that the market system in itself
may not achieve these objectives (whether individually or collectively). Hence,
there is the need for government to set up institutions and adopt policies that
will indirectly influence the economy (the level of economic activities) or put
differently, the pattern of resource allocation in the society. Such actions
are judged a needed assistance for the effective functioning of the price
system.
