To What Extent Is the Government Achieving 4 Macro Objectives

Topics: Macroeconomics, Monetary policy, Inflation Pages: 2 (422 words) Published: September 26, 2012
To what extent is the current government achieving 4 macro objectives The current UK government is currently operating as a mixed economy, but more in favour a capitalist style. There are 4 macro objectives that the government aim for. These are: * Balanced economic growth

* Low unemployment
* Low trade deficit
* Low Inflation

Starting with the current economic rate of growth, the government is currently nowhere near to achieving its objectives, as of right now the economy isn’t growing, actually the opposite. We are currently national debt because right now, government spending is much higher than income. One way that we could get out of this is by increasing tax, which is one kind of fiscal policy. This will increase income, so the government will have more money to spend and or use to repay their debts, but more importantly, it will allow the government to get back on track to a balanced growth. With the levels of unemployment, the government are failing to keep that under control. They are currently at record high levels, at 1.6 million unemployed. This is due to that businesses had to make redundancies as they were struggling to keep up with their debts. A method of suppressing high levels of unemployment is to use a fiscal policy and introduce new projects for people can get jobs within (for example, London 2012 Olympics). In the UK there will always be a trade deficit, as we rely on imports, and we don’t manufacture enough to ever reach trade equilibrium, however, currently, trade deficit isn’t too high, as the goods we buy are mainly imported, and as people don’t have much money, they are not spending it on imports, where as the exports we produce are remaining high, as they are low demand, high price and quality goods (example Rolls Royce cars and jets). Finally, the government is failing yet again to control the level of inflation, as it is currently high, at 5%. This is because many commodities went up in price, such as oil. This had...
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