Answer to Question #311339 in Macroeconomics for Jackey

Question

Briefly define the following macroeconomic objectives and explain in your own words how each can be applied to improve the economy.

1. Economic growth and increasing employment
2. Stable and low inflation
3. Distributional and equity objectives and the reduction of inequality
4. Economic development and poverty reduction.

Answer 1

1.Economic growth is a gradual increase in the production of goods and services a given country by comparing more than one period of time. It assists in higher tax remittances to the government and less is spent in the unemployment programs. On the other hand, increasing employment is making income earning opportunities more available. It increases a country's GDP.

2.Stable inflation is a situation where the prices of goods and services increases gradually but not more than 2% per a year. At this level of inflation, there's a substantial quantity of individual people's time and resources from the economy are invested in searching for mechanisms to defend themselves from inflation. Whereas low inflation is a situation where prices of goods and services increases slowly. I improves the well being of the population.

3.Equitable distribution of income is a situation where welfare are are distributed in a manner that ensures fairness and allowing members of the economy to have the same opportunity to accumulate wealth. The Government redistributes tax revenue to ensure equitable distribution of wealth. Whereas Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and action in this regard.

4.Economic development is a situation where wealth is created from which a country's benefits are realized. It improves the service delivery and reduces the poverty level. Whereas poverty reduction is a situation where measures, both economic and humanitarian, are executed that are intended to permanently lift people out of poverty. Reducing poverty among people increases their life expectance and their general living conditions.