Edexcel Economics A-Level - Macroeconomic Objectives

A situation where a country spends more than it earns, leading to a growing imbalance of payments.

Policies aimed at boosting the overall production capacity of an economy, leading to long-term growth.

Policies that manipulate the interest rate to influence demand and economic activity.

This happens when high interest rates benefit lenders and savers, often older people who have accumulated savings.

Policies intended to improve the performance of the economy by managing the government's expenditure and taxation levels.

Economic growth can be achieved without damaging the environment, but it's likely to be slower and have higher costs.

Some countries like India experienced rapid economic growth, which led to balance of payments problems due to increased demand for imported goods caused by rising incomes.

A.W. Phillips observed that a lower unemployment rate is usually associated with higher inflation. This concept is called the Phillips curve.

In the 1970s, there was a surprising situation of high unemployment and high inflation, contradicting the expected relationship shown by the Phillips curve. This is called stagflation.

Expansionary fiscal and monetary policies aim to increase economic activity by boosting spending. However, this can lead to higher inflation and a worse balance of payments.

Deflationary policies aim to reduce inflation by lowering spending, but this can negatively impact employment and economic growth.

Raising interest rates is a tool to control inflation, but consistently high rates can discourage long-term investments and hinder economic growth.

It describes the relationship between the rate of change in wages and the unemployment rate. This relationship was later generalized to represent the relationship between unemployment and inflation.

The aim of the government to ensure the economy grows steadily over time, typically around 2.5% in the UK. This ensures long-term prosperity and helps to improve living standards.

The goal of the government to keep unemployment as low as possible, ideally reaching 'full employment' where everyone who wants a job can find one.

The aim of the government to keep the rate of price increases (inflation) at a stable and manageable level, usually around 2% in the UK. This helps households and businesses plan for the future with certainty.

The government's goal to ensure that the UK's trade with other countries is balanced, specifically focusing on the current account of the balance of payments. This means making sure the country is not borrowing too much money from other countries.

The government's aim to control its borrowing and spending to prevent excessive national debt accumulation. This helps to ensure the government can borrow money at a reasonable rate in the future.

The Government's objective to protect the environment for future generations by ensuring the sustainable use of natural resources and minimizing pollution. This aims to achieve long-term environmental stability.

The effort to minimize the gap between the rich and the poor, aiming to create a fairer distribution of income and wealth within society.

The government's role in influencing the economy to achieve its desired outcomes, aiming to improve the country's economic performance.