2.7 What are the macroeconomic objectives of governments? Do they conflict?

What students need to learn:

Students should be able to:
Additional Guidance Notes
Current macroeconomic objectives
Identify, outline and evaluate the major current macroeconomic objectives.
Objectives may include increased economic growth; control of inflation; a reduction in unemployment; restoration of equilibrium in the Balance of Payments; making the distribution of income more equal; and protection of the environment.
Conflicts between objectives
Consider basic conflicts between objectives, such as inflation and unemployment; or economic growth and sustainability.
Possible trade offs include those between inflation and unemployment; growth and
sustainability; inflation and equilibrium on the current account of the Balance of

Students should understand the short run Phillips curve, but the long run and expectations augmentation are not required.
Ahmed Xahir
Ahmed Xahir

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