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Last updated
Sep 12, 2023
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title: Chapter 7
# Macroeconomic objectives
- The key macroeconomic objectives are
- Sustainable economic growth
- Price stability
- Full employment
- Economic growth is defined as an increase in the real output of goods and services produced in a country
- Measured in
- A desirable growth rate in Australia is 3% p.a.
- We want to ensure sustainability and employment
# Sustainability
- Encompasses means;
- Price stability
- refers to low levels of inflation
- The target is 2-3% p.a.
- This is important; inflation adversely affects the spending power of households and firms
- Full employment
- Occurs when everyone who is willing to work can find employment
- We want a natural rate of unemployment - currently 4.5% of the workforce
- Must recognise personal goals
- We can implement this into the PPF curve by a shift to the right
# GDP
- Is the total market value of final goods and services produced in a country in a certain period of time
- Can be nominal or real
- Nominal is GDP before inflation
- Real is GDP after inflation is accounted for