Objectives of Macroeconomics - 1477 Words

Introduction to Macroeconomics Chapter 1 Introduction to Macroeconomics 1.1 INTRODUCTION †¢ †¢ †¢ †¢ †¢ †¢ †¢ Economics is divided into two main branches: microeconomics and macroeconomics. Macro means large, and micro means small. Microeconomics takes a close-up view of the economy by concentrating on the choices made by individual participants in the economy such as consumers, workers, business managers and investors. Microeconomics stresses on the role of prices in business and personal decisions. One of its major goals is to understand how prices of particular goods and services are determined and how prices influence decisions. Because of this reason, microeconomics is sometimes called price theory. Macroeconomics looks at the economy†¦show more content†¦The cycle of booms and recessions is known as the trade cycle or business cycle. (d) To Achieve Equilibrium in Foreign Sector †¢ A country will try to get an overall surplus balance of payment (more money coming in than money going out). If we have a deficit, this means that the country will have to borrow from abroad or attract deposits from abroad. This results in paying high interest rates and increasing country’s debt. †¢ Macroeconomics tries to understand what determines the scale and balance of our international economics transactions – our international balance of payments. (e) Equitable Distribution of Income †¢ Most countries/government seeks to narrow the range of the size distribution of income, reducing the incomes of those at the upper end and raising the incomes of those at the lower end. Methods to change the size distribution of income are: †¢ Tax policy - The most effective is progressive taxation. †¢ Expenditure policy - This includes subsidies, transfer payment and educational scheme. The benefits received tend to vary with income. Many transfer payments benefit lower income group. Other expenditures such as higher education tend mainly to benefit middle-income groups. 1.3 OBJECTIVES OF ISLAMIC MACROECONOMICS. In an Islamic economic system, the basic policy objectives are: æ § ¨ æ § ¨ æ § ¨ æ § ¨ To achieve social justice and distribution of income and wealth Universal education To achieve optimal rate of economic growth To maximize employment generation (a)Show MoreRelatedMacroeconomic Objectives2174 Words   |  9 Pages----------------4-5 Macroeconomic objective----------------------------------------------------------------4-5 Part three--------------------------------------------------------------------------------------5-7 Conflicts--------------------------------------------------------------------------------------5-7 Reference-------------------------------------------------------------------------------------8 Macroeconomic assignment Elvis yu Read MoreMacroeconomic Objectives Of The Malaysian Economy1542 Words   |  7 PagesFour macroeconomic objectives In this section I will be discussing how well does Malaysia manage to achieve the four macroeconomic objectives which are; high and stable economic growth, low unemployment, low inflation and avoidance of large balance of trade deficit. One of the ways that Malaysia’s economy plan to reach the goals of high and stable economic growth is by implementing a fiscal consolidation â€Å"The Malaysian government has embarked on fiscal consolidation† (Ratings and Investment InformationRead MoreMacroeconomic Objectives And Economic Growth1371 Words   |  6 Pagesmacroeconomic objectives simultaneously? In answering the above question the author has considered the four macroeconomic objectives and these are: 1) Economic Growth Economic growth is the increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Economic growth can be measured in nominal terms, which includes inflation, or in real terms, which are adjusted for inflation. (Investopedia n.d) 2) Lower unemployment Lower unemployment means thatRead MoreMacroeconomic Objectives Of Fiscal And Monetary Policies1692 Words   |  7 PagesMacroeconomics focuses on the economy as it experiences aggregate changes, analysing outcomes of government policies and how adequate these can be. There are many theories on the best policies to achieve the macroeconomic objectives successfully. In this essay, I will be explaining the aims and objectives of fiscal and monetary policies, the effects of quantitative easing, and how the 2008 Financial Crisis affected the United Kingdom as well as the global economy. Governments use macroeconomic objectivesRead MoreEconomic Growth Is A Macroeconomic Policy Objective For Countries1467 Words   |  6 PagesDEFINITION Economic growth is a macroeconomic policy objective for countries. The growth of economies have two meanings. First, economic growth means the gross domestic product (GDP) increases within the given period of time.The increases in GDP also means the increase in the value of national output or national expenditure.The other meaning is the increasing of production when using all the scarce resources,which can be showed in the PPF(Production Possibility Frontier).In the diagram below,theRead MoreImportance of the Macroeconomics Objectives Towards the Malaysia Economic Performance.1564 Words   |  7 Pages| 2.0 | Macroeconomic Objectives | 4 | 3.0 * 3.1 * 3.2 | Economic GrowthThe ImportanceExample | 556 | 4.0 * 4.1 * 4.2 | UnemploymentThe ImportanceExample | 778 | 5.0 * 5.1 * 5.2 | InflationThe ImportanceExample | 9910 | 6.0 | Conclusion | 11 | 7.0 | References | 12 | 8.0 | Appendix | 13 | 1.0 Introduction This assignment is to discuss the importance of the Macroeconomics Objectives towards the Malaysia economic performance. There are four main Macroeconomics Objectives, but inRead MoreDiscuss how far recent UK economic policy has been successful in achieving the macroeconomic objectives1165 Words   |  5 Pagesï » ¿Discuss how far recent UK economic policy has been successful in achieving the macroeconomic objectives. The four main macroeconomic objectives are: full employment, price stability (low and stable inflation), sustainable economic growth, and a healthy Balance of Payments. A diagram showing unemployment and jobseekers allowance in the UK: On the diagram shown above, unemployment within recent years (2008-2013) is seen to be increasing. In 2011 unemployment peaked at 2.6 million which aroundRead MoreEvaluate Two Macroeconomic Objectives the Government in Your Home Country Aims to Achieve and How Effective Is the Government in Achieving Them?1286 Words   |  6 PagesIceland had a substantial impact on the British economy and the currency volatilities of the Euro have had implications far beyond the Euro zone. In this essay, I will examine how British macroeconomic policies have attempted to reduce the damage of recent economic turbulence in the US on the UK economy. Macroeconomics, policies that aim to improve economic growth, maximise national income and raise the standard of living for citizens, have four main methods: full employment, inflation, balance of paymentsRead MoreGovernements Use Fiscal Policy to Help Them Achieve Their Macroeconomic Objectives Explain What Is Meant by This Statement and Discuss Specif ic Fiscal Measures That the Uk Government Has Implemented in Recent Years to1832 Words   |  8 Pagesthem to achieve their macroeconomic objectives’ Explain what is meant by this statement and discuss specific fiscal measures that the UK government has implemented in recent years to influence economic activity in the built environment. Definitions: FISCAL POLICY: â€Å"A combination of government spending and taxation used to achieve macroeconomic management. (The flow of government money in and out of the treasury.)† (Danny Myers, 2006, pgs 75126) MACROECONOMIC OBJECTIVES: â€Å"Targets relatingRead MoreThe Reserve Bank Of Australia ( Rba ) Introduced A New Monetary Policy786 Words   |  4 Pagesthe key objectives of macroeconomics and how do they effect and change the supply of money with interest rate? To make a decision the RBA must examine the economic growth and what guarantees long- run economic growth? Money has key functions but what are they and how does it function within the reserve bank? How will lowering the cash rate provide a solution to the economies situation? What is the result of a lower cash rate for future demands for consumption? It is clear that Macroeconomics has objectives