Economic Goals Notes PDF

Economic Goals Notes Economic Goals Every political system attempts to establish economic goals to focus the use of productive resources Complementary Conflicting Reaching one goal makes another goal easier to...

Economic Goals Notes Economic Goals Every political system attempts to establish economic goals to focus the use of productive resources Complementary Conflicting Reaching one goal makes another goal easier to Reaching one goal makes another goal more achieve difficult to achieve Political Stability Stable government=helps with long-term planning and investment Need consistency to main resources How does this relate to scarcity of resources? uncertainty= unstable political environment= reduced investments and economic growth Poor economic growth= government collapse Complementary Public debt maintaining government will reduce public debt Conflicting Balance of payments & currency of more imports than exports, currency will be weak hurting current public debt Reduced Public Debt How much a country owes to lenders outside of itself (i,e. Businesses, individuals and other government How does this relate to scarcity of resources? Public debt= no loans for investments= challenge to grow Complimentary Economic growth- increase in producing goods and services will help to reduce countries debt Economic Growth Increase in economy total production of goods and services Increase can result in new natural resources, skilled labour forces, technological innovation If economy grows, easier to maintain public debt How does this relate to scarcity of resources Economic growth= more opportunities for companies = more resources Economic decay= less resources forcing business to make difficult decisions Complimentary Full employment, expanding economy requires employment of more resources (labour) Conflicting Price stability expanding economy will result in increase of competition of resources, which will increase resources to meet demand Increased Productivity & Efficiency Resources used efficiently maximising profit and expanding economy How does this relate to scarcity of resources Using resources effectively allows business to not give up anything Productivity and efficiency = more resources = economic growth Complimentary Economic growth, productivity results in more resources feeding into the economy Conflicting Prices stability-more resources=more competition= higher demand= increase in price Equitable Distribution of Income Dividing total national output requires analysis-many thoughts on how to fairly distribute income How does this relate to scarcity of resources Equal distribution of income amongst people= promotes economic growth If people not satisfied with income= conflicts arise resulting in uncertainty Complimentary Political stability fair distribution of income will benefit the government Price Stability Inflation: increase in prices Deflation: fall in prices UNHEALTHY!! How does this relate to scarcity of resources? Increase in prices= increased resources costs= less resources being purchased = decay in economic growth Complementary Economic growth- achieving prices in stability gives certainty and confidence to householders, investors, increasing spending’ Conflicting Full employment: full employment results in higher prices resulting in lower spending, Less demand results in lower employment Full Employment Promotes employment= economic challenges Technology replacing humans= challenging for economy How does this relate to scarcity of resources? Employed workers spend, increasing economic growth Not enough people with job/income, less spending resulting in decrease in economic growth Resources produces the goods that satisfy what we want and need which decreases scarcity problems Complementary Economic growth- employing more resources allows more people to spend Resource allocation- high demand of labour = resource allocation becomes more efficient as workers seek higher wages, Higher wages = more spending Conflicting: Price stability- employment increases = labour has more income, putting pressure on prices Viable Balance of Payments & Stable Currency Importing, exporting, and lending is important More imports than export is a negative effect on economy import and export must be balanced How does this relate to scarcity of resources? Bad currency and receiving more imports = weak economy Economic growth- more exports with other countries results in high demand of products/services Economic Freedom Freedom of choice Free to choose when and how to consume, save, or invest How does this relate to scarcity of resources? The freer economy is, the more productive resources will be = productivity/efficiency Complimentary Economic growth- higher productivity = more resources  Environmental Stewardship Adjust the way we carry out economic activities Responsible use of natural resources keeping into account the interests of society and the future Complimentary Economic growth - healthy environment = political stability = higher demands on resources How does this relate to scarcity of resources! Unhealthy environment = decrease in economic growth, challenging businesses to grow Check Your Understanding: Goals P. 43 1 2 3 4