Google
Wednesday 
December 13, 2017 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
CAN: The Andean Community (CAN) is a subregional organization endowed with an international legal status, which is made up of Bolivia, Colombia, Ecuador, Peru and Venezuela. The main objectives of the Andean Community are to promote the balanced and harmonious development of the member countries under equitable conditions, to boost their growth through integration and economic and social cooperation and to enhance participation in the regional integration process with a view to the progressive formation of a Latin American common market. The Andean Community started operating on August 1, 1997 with a General Secretariat, whose headquarters are in Lima (Peru), as its executive body.

Visit the GLOSS*arama


MACROECONOMIC GOALS:

Three conditions of the mixed economy that are most important for macroeconomics, including full employment, stability, and economic growth, that are generally desired by society and pursued by governments through economic policies.
Macroeconomic goals are three of the five economic goals of a mixed economy that are most important to the study of macroeconomics. They are full employment, stability, and economic growth.

Full Employment

Full employment is achieved when all available resources (labor, capital, land, and entrepreneurship) are used to produce goods and services. This goal is commonly indicated by the employment of labor resources (measured by the unemployment rate). However, all resources in the economy--labor, capital, land, and entrepreneurship--are important to this goal. The economy benefits from full employment because resources produce the goods that satisfy the wants and needs that lessens the scarcity problem. If the resources are not employed, then they are not producing and satisfaction is not achieved.

Stability

Stability is achieved by avoiding or limiting fluctuations in production, employment, and prices. Stability seeks to avoid the recessionary declines and inflationary expansions of business cycles. This goal is indicated by month-to-month and year-to-year changes in various economic measures, such as the inflation rate, the unemployment rate, and the growth rate of production. If these remain unchanged, then stability is at hand. Maintaining stability is beneficial because it means uncertainty and disruptions in the economy are avoided. It means consumers and businesses can safely pursue long-term consumption and production plans. Policies makers are usually most concerned with price stability and the inflation rate.

Economic Growth

Economic growth is achieved by increasing the economy's ability to produce goods and services. This goal is best indicated by measuring the growth rate of production. If the economy produces more goods this year than last, then it is growing. Economic growth is also indicated by increases in the quantities of the resources--labor, capital, land, and entrepreneurship--used to produce goods. With economic growth, society gets more goods that can be used to satisfy more wants and needs--people are better off; living standards rise; and scarcity is less of a problem.

Tradeoffs

The three macroeconomic goals of full employment, stability, and economic growth are widely considered to be beneficial and worth pursuing. Each goal, achieved by itself, improves the overall well-being of society. Greater employment is typically better than less. Stable prices are better than inflation. Economic growth is better than stagnation.

However, the pursuit of one goal often restricts attainment of others. For example, policies that promote economic growth might create unemployment or policies that improve stability might limit economic growth. Macroeconomic goals are also often in conflict with the microeconomic goals of efficiency and equity.

Consider a few hypothetical situations, depicted by the hypothetical Republic of Northwest Queoldiolia, in which the pursuit of one goal limits achieving another goal.

  • Full Employment and Stability: The Central Bank of Northwest Queoldiolia seeks to promote lower rates of unemployment through expansionary monetary policy. The economy expands, unemployment falls, and full employment is achieved, but inflation emerges from the over stimulated economy.

  • Economic Growth and Full Employment: Seeking to keep pace with economic growth in neighboring Southeast Queoldiolia, the President of Northwest Queoldiolia enacts an intense program of scientific research and development. The program bears ample fruit, creating scores of new technological innovations that lead to high rates of economic growth, but implementation of the innovations disrupts the economy throwing millions of people who lack the necessary skills or training needed by the new technologies out of work.

Policies and Politics

The pursuit of these three macroeconomic goals is inherently an act of normative economics. In fact, the "norm" part of term normative economics is synonymous with the word "goal." Normative economics is essential to the pursuit of economic goals.

In a mixed economy, the pursuit of these goals is largely directed by governments. This, of course, brings into play the wonderful world of politics and never-ending debates over which of these three macroeconomic goals is most worth pursuing with economic policies.

As the discussion turns to politics and policies, two viewpoints tend to emerge--liberal and conservative. Generalities are, of course, fraught with exceptions. However, with that caution in mind, note that each of the two political views have historically placed greater emphasis on the attainment of some goals over others.

Liberals have tended to seek full employment over stability and economic growth. Conservatives, in contrast, have sought economic growth and stability, especially price stability, more so than full employment.

<= M3MACROECONOMIC MARKETS =>


Recommended Citation:

MACROECONOMIC GOALS, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2017. [Accessed: December 13, 2017].


Check Out These Related Terms...

     | full employment | economic goals | stability | price stability | economic growth | microeconomic goals | efficiency | equity | macroeconomic problems | macroeconomic sectors |


Or For A Little Background...

     | macroeconomics | mixed economy | normative economics | government functions | political views | conservative | liberal |


And For Further Study...

     | economy | macroeconomic problems | business cycles | gross domestic product | inflation | unemployment | seven economic rules | three questions of allocation | economic system | economic thinking | four estates | free enterprise | production possibilities | fallacies | macroeconomic theories | macroeconomic markets | circular flow | unemployment rate | inflation rate | business cycles | fiscal policy | monetary policy | unemployment | inflation |


Search Again?

Back to the WEB*pedia


APLS

RED AGGRESSERINE
[What's This?]

Today, you are likely to spend a great deal of time wandering around the shopping mall seeking to buy either car battery jumper cables or a dozen high trajectory optic orange golf balls. Be on the lookout for high interest rates.
Your Complete Scope

This isn't me! What am I?

The standard "debt" notation I.O.U. does not mean "I owe you," but actually stands for "I owe unto..."
"Follow effective action with quiet reflection. From the quiet reflection will come even more effective action. "

-- Peter F. Drucker, author

LTFV
Less Than Fair Value
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2017 AmosWEB*LLC
Send comments or questions to: WebMaster