Wednesday, October 9, 2019

Conflict between the Governments Macroeconomic Objectives Essay

Conflict between the Governments Macroeconomic Objectives - Essay Example Increase in Inflation rate which is defined as the regular rise in prices. To have stability in prices, the inflation rate should be zero. Having zero inflation rate is hard to achieve and also undesirable for an economy. A basic objective of the government to keep the inflation rate low and keep it in that level for a prolonged period of time (Munasinghe, 1996). In this regard, internal balance is aimed which is full employment with zero rates of inflation. Technically, it is measured as the annual rate of change of the Retail Price Index (RPI).Full employmentFull employment is achieved when all the human recourse which are capable of work and willing to work in an economy are fully employed in different sectors. Though this is really not achievable that’s what frictional and structural unemployment is considered to be present at the same time.High and sustainable economic growth: A high economic growth is achieved by allowing an increase in the living standards.In this regar d, the no structural and environmental difficulties should be present to hinder the growth in the economy. Economic growth tends to be measured in terms of the rate of change of real GDP (Gross Domestic Product).Equilibrium in the balance of paymentsThe aim is to bring balance in the payment with the use of any artificial constraint: the goal is to achieve balance in exports and imports in long run. The deficit of payments should be balanced by the surplus in other payments to achieve the complete balance.

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