Macroeconomic Aims
Stop prices changing too much
Price stability
Government builds bridges and schools
Infrastructure spending
Bank that controls loan costs
Monetary policy
Everything getting more expensive
Inflation
Total value of country's output
Gross Domestic Product
Country making more stuff yearly
Economic growth
Extra tax on petrol
Indirect tax
Cash banks can't lend out
Reserve requirement
Prices keep going down
Deflation
Single seller controls market
Monopoly
Help poor catch up to rich
Income redistribution
Government spends more than it gets
Budget deficit
Printing new money electronically
Quantitative easing
Too much spending → higher prices
Demand-pull inflation
Our money buys less foreign currency
Exchange rate depreciation
Almost everyone has a job
Full employment
Money when you lose your job
Unemployment benefits
Making loans more expensive
Tight monetary policy
Oil shock makes things costlier
Cost-push inflation
Jobs lost to robots
Technological unemployment
Don't buy more than we sell abroad
External balance
Help that kicks in automatically
Automatic stabilizers
Buying/Selling government debt
Open market operations
Pay rises → price rises → more pay rises
Wage-price spiral
Country's wealth per person
GDP per capita