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Chapter 1: Q 14. (page 25)

What are the three main goals of macroeconomics?

Short Answer

Expert verified

The three main goals of macroeconomics are:

  1. Low Inflation
  2. Low Unemployment
  3. Growth in the Standard of Living

Step by step solution

01

Step 1. Defining Macroeconomics

Macroeconomics remains the department of economics that deals with the economy as a whole. It concentrates on overall problems such as unemployment, inflation, and development.

02

Step 2. Concept of Low inflation 

The first main goal of macroeconomics is Low Inflation.

Inflation stands for the increase in the normal price level. Macroeconomics desires to regulate the rate of inflation.

03

Concept of Low Unemployment 

The second main goal of macroeconomics is low Unemployment

Unemployment stands in a condition when an individual is seeking a job but cannot discover a paid job. Macroeconomics analyses elements that will improve the rate of occupation in the economy.

04

Concept of the Growth of Standard of Living 

The second main goal of macroeconomics is the growth of Standard of Living

The economic development of the nation is defined by the average living of that country. Macroeconomics examines the elements that influence the standard of living and concentrates on enhancing it.

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Most popular questions from this chapter

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.

You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are measured in dollars, but the benefits of the vacation are psychological. How can you compare the benefits to the costs?

Suppose, as an economist, you are asked to analyze

an issue unlike anything you have ever done before.

Also, suppose you do not have a specific model for

analyzing that issue. What should you do? Hint: What

would a carpenter do in a similar situation?

What is inflation and what causes it?

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?
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