Government Objectives
Visão Geral
A finance minister has four targets pinned above the desk: keep prices stable, keep people in work, keep the economy growing, and keep the country's trade in balance. Hitting any one of them is difficult. The genuinely hard part, and the part the examiners keep coming back to, is that hitting one can push another further out of reach.
This is the largest topic on the specification and it is the spine of Paper 2. You will learn how each of the four objectives is measured, from real GDP per head to price indices to the unemployment rate to the current account, and you will do the arithmetic that appears on every paper. You will separate growth from development, meet the four types of unemployment and the two causes of inflation, and see why a government that succeeds at growth may find its trade balance and its environment paying the bill. Finally you will look at who ends up with the income, and what a government can do to change that.
Objetivos
- The main economic objectives of a government
- Conflicts arising from the pursuit of government objectives
- Other government objectives
- Moral, ethical and sustainability considerations
- Economic growth and development
- The significance of economic growth to economies
- Causes, costs and benefits of economic growth
- Government policies to achieve economic growth
- Economic Development
- Environmental and other limits to growth and development
- Employment and unemployment
- Employment and unemployment and how they are measured
- Types, causes and consequences of unemployment
- Government policies to reduce unemployment
- Inflation and price stability
- What is inflation?
- Measures of inflation
- Causes of inflation
- Consequences of inflation
- Government policies to manage inflation
- Balance of payments
- Balance of trade and balance of payments
- Balance of payments surpluses and deficits on the current account
- Government policies to influence the balance of payments
- Distribution of income
- Income and wealth inequality
- Causes of income and wealth inequality
- Consequences of income and wealth inequality
- Government policies to redistribute income and wealth and their consequences
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- Which of the following is a principal economic objective of government policy? A. Maximising the profits of firms B. Raising the level of imports C. Steady economic growth D. Increasing the size of the population Answer: C
- Which type of unemployment is caused by workers not having the skills needed for the jobs available? A. Cyclical B. Frictional C. Seasonal D. Structural Answer: D
- A country's price index rises from 120.0 to 126.0 over a year. What is the annual rate of inflation? A. 4.8% B. 5.0% C. 6.0% D. 12.6% Answer: B
- A country has a labour force of 20 million, of whom 1.5 million are unemployed. What is the unemployment rate? A. 1.5% B. 7.5% C. 13.3% D. 75.0% Answer: B
- Which of the following identifies the most likely effects of a significant increase in economic growth? A. Unemployment increases, budget deficit increases B. Unemployment increases, budget deficit reduced C. Unemployment decreases, budget deficit increases D. Unemployment decreases, budget deficit reduced Answer: D
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