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Economics Revision Notes Unit 12

Economic Objectives
Macroeconomic objectives of the UK:

Economic growth
Full employment
Price stability/low inflation
Balance of payments equilibrium

How do Ethical issues affect the achievement of government objectives?

The UK government believes that it is ethically right to aim to minimise poverty. The government also…

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Economics Revision Notes Unit 12

resources in the economy are more fully used and become scarcer, which leads to the prices of resources
increasing.

Balance of payments: higher growth leads to higher consumer expenditure and this means more imports are
purchased. This leads to current account section moving close to,…

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Economics Revision Notes Unit 12

gains from the external benefit of the new business in terms of the employment opportunities and the extra
income generated.

What can governments do about Externalities?

These examples illustrate how governments might intervene:

Car drivers don't pay the negative externalities caused by exhaust fumes. Taxes…

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Economics Revision Notes Unit 12

Fiscal policy refers to the choices and decisions made for government spending and the taxation that will go
towards financing for expenditure.

How can fiscal policy be used to achieve each government objective?

Inflation ­ increases in government spending can lead to high inflation. If…

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Economics Revision Notes Unit 12

was left to solely to private firms to provide, those on lower incomes might not receive the full
benefits of the health care and may not, as a result, enjoy the same level of health.

The health of the population is linked with income. Therefore,…

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Economics Revision Notes Unit 12

Free trade; one of the main attractions of being an EU member is that it allows free trade between
EU countries. This means that buying and selling goods between countries should be as easy as
buying and selling within one country. If free trade exists,…

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Economics Revision Notes Unit 12

become more efficient through economies Common Agricultural Policy ­ The UK
of scale. contributes money for the EU's CAP. This is
a system whereby agricultural prices are
Higher incomes ­ free trade should benefit guaranteed and this means that farmers can
all members of the…

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Economics Revision Notes Unit 12

different countries as easily as when foreign countries as they appear cheaper.
separate currencies existed. This is not possible in a single currency.

Greater economies of scale ­ being in the
Eurozone have encouraged greater trade
with other countries in the Eurozone. This
has allowed…

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Economics Revision Notes Unit 12

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