Monday, March 17, 2008
13. The three primary macroeconomic policy goals are economic growth, low unemployment and low inflation.
13. The three primary macroeconomic policy goals are economic growth, low unemployment, and low inflation. Economic growth is an increase in a country’s standard of living. Unemployment is the condition of wanting, but not having, a paid job. Inflation is a general increase in the price level, which is the general level of prices for goods and services in an economy. A price index is used to measure the price level. All three goals are important because of their influence on the standard of living. Economic growth is the primary determinant of the standard of living, however, and is thus the ultimate macroeconomic goal. Economic policy goals are discussed in greater detail in modules 6 (Economic Growth), 7 (Low Unemployment), and 8 (Low Inflation).