Macroeconomic Objectives
This is one of the main macroeconomic objectives that refers to an increase in real GDP over time.
What is economic growth?pg 278
This classic trade-off shows that lower unemployment may come at the cost of higher inflation in the short run.
What is the short-run Phillips curve? pg 287
These policies aim to increase long-run aggregate supply and the economy’s productive potential.
What are supply-side policies?304
This type of policy involves changing interest rates or the money supply to influence aggregate demand.
What is monetary policy?306
This macroeconomic objective focuses on keeping the general price level stable.
What is low and stable inflation? pg.279
when achieving one macroeconomic objective conflicts with achieving another.
What is a trade-off? pg. 290
Supply-side policies that focus on deregulation, privatization, and promoting competition fall under this type.
What are free-market supply-side policies?294
The use of government spending, taxation, and borrowing to manage the economy is known as this policy.
What is fiscal policy?306
Governments aim for this labor-market objective, meaning people who want work can find jobs.
What is low unemployment? pg.278
What is trade-off between unemployment and inflation? pg288
Government investment in education and training is an example of this type of supply-side policy.
What are interventionist supply-side policies?294
Policies aimed at increasing aggregate demand during a recession are described as this.
What are reflationary policies?306
This objective concerns equilibrium between exports and imports on the balance of payments.
What is a balanced current account?pg 279
Faster growth can worsen this macroeconomic objective by increasing imports.
What is equilibrium on the current account of the balance of payments?pg289
Making wages, hours, and contracts more adaptable refers to improving this aspect of the labor market.
What is labor market flexibility?297
A monetary policy where central banks buy financial assets to increase lending and spending.
What is quantitative easing?308
When government spending is equal to government revenue, this budget position is achieved.
What is a balanced budget? pg 279
Expanding output can clash with this non-economic objective due to pollution and resource depletion.
What is the environment?289
These supply-side policies aim to correct market failure rather than remove barriers to competition.
What are interventionist policies?304
When the government runs a deficit to stimulate the economy, this fiscal stance is being used.
What is expansionary (reflationary) fiscal policy?311