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Chapter 1: Problem 14

What are the three main goals of macroeconomics?

Short Answer

Expert verified
The three main goals of macroeconomics are: 1) achieving full employment, which ensures jobs for all individuals willing and able to work; 2) maintaining price stability by keeping inflation low and stable, which helps in better future planning and reducing economic disruptions; and 3) achieving sustainable and balanced economic growth, which allows for a higher standard of living and opportunities for future generations while avoiding severe booms and busts and environmental harm.

Step by step solution

01

1. Identify the first main goal of macroeconomics

The first main goal of macroeconomics is to achieve full employment. This means that there are jobs available for all individuals in the workforce who are willing and able to work. High employment levels lead to increased economic output and a more prosperous society.
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2. Identify the second main goal of macroeconomics

The second main goal of macroeconomics is to maintain price stability. This means keeping inflation (the rate at which prices rise) low and stable over time. Price stability helps people better plan for the future and reduces the potential for economic disruptions caused by sudden changes in the price level.
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3. Identify the third main goal of macroeconomics

The third main goal of macroeconomics is to achieve sustainable and balanced economic growth. This means growing the economy at a steady pace over the long term without causing severe booms and busts or significant environmental harm. Sustainable growth enables a higher standard of living for the population and creates opportunities for future generations. In conclusion, the three main goals of macroeconomics are to achieve full employment, maintain price stability, and promote sustainable and balanced economic growth. Each of these goals works together to contribute to the overall health and stability of an economy.

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Most popular questions from this chapter

Why would division of labor without trade not work?

Macroeconomics is an aggregate of what happens at the microeconomic level. Would it be possible for what happens at the macro level to differ from how economic agents would react to some stimulus at the micro level? Hint: Think about the behavior of crowds.

Why might Belgium, France, Italy, and Sweden have a higher export to GDP ratio than the United States?

A balanced federal budget and a balance of trade are secondary goals of macroeconomics, while growth in the standard of living (for example) is a primary goal. Why do you think that is so?

Are households primarily buyers or sellers in the goods and services market? In the labor market?
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