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Briefly explain the main macroeconomic objectives of governments.
Definition of macroeconomic issues
a) Enhance in national income per unit of time, a flow method
b) Enables the economy to improve living standards
a) Percentage of labour force employed
b) shows utilisation of social factor of production
a) steady rate of price enhance; change in CPI/RPI/GDP deflator
b) Permits predictability and reliability in the economic environment
a) balance of payments
i) equilibrium in foreign sector trade, i.e. exports and imports
b) exchange rate
i) stability in external value of currency
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Adding the economic activities of government to the circular flow model shows that: 1. Government spending creates inflation 2. Government purchases of goods and services,
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conditions of pareto optimality
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