MACROECONOMIC OBJECTIVES

Macroeconomic Objectives

Macroeconomic Objectives

Introduction

Macro economics refers to the managing of the economy by introducing different models, theories and concepts related to macro economics and also how these macro economic problems could be evaluated and analyzed. Traditionally, macro economics is broken down into two parts i.e. macro economics policy objectives and macro economics theory. Macroeconomic policy objectives explain how policy makers and governments tackle with market failures in order to cope up with economic stability and performance in a society. When policy objectives are set, improvement in performance begins to rise which involves more employment, development and economic growth that is sustainable. However, macro economic theory consists of models that are used for the whole economy. These models are used by the economists so they can explain the importance, role and structure of the economy. Not only has this but it also helped economists to make forecast about the economy and its prices, exchange rates other variables.

Discussion

In United Kingdom (UK) policy makers would need to set policy targets in order to achieve their policy objectives. These policy targets are usually fixed and they include both, less known and well known targets such as employment, exchange rates and UK inflation target which is 2%. Markets are usually interdependent nowadays, they just cannot work on their own and they are doomed to link inextricably with another. An example of Iceland can be quoted here, where Iceland's banking sector was crashed leaving a huge impact on Euro and British economy.

However, some of the macroeconomic policies by the British have helped to reduce the damage on UK economy which could have occurred by turbulences in US economy. Some of the main methods to increase the standard of living for the population, maximizing national income and increasing economic growth include: balance of payments, full employment, demand and supply equilibrium and inflation. The policies followed will further explain how UK economy and the government have effectively played their part to stabilize British economy in times of international turbulence. In order to evaluate United Kingdom's policies, we first have to know what government's desire from the macroeconomic policies they make. According to the research, there are four major targets by all governments that have to be achieved when we talk about macro economics. These four targets are: strong economic growth, low inflation Consumer Price Index (CPI) i.e. 2%, to reduce unemployment and last but not the least ...