The Government's Objectives and Inflation
The government's objective is an aim that they wish to achieve. This is to balance aggregate demand (AD) with aggregate supply (AS) in order to influence key economic indicators and achieve their economic objectives. The economic objectives of the government can be split into for main objectives:
- To ensure that the balance of payments is in surplus and in credit in order to ensure that the government is not relying on foreign support in goods and thus therefore avoid debt issues. This therefore increases the flexibility of the government and allows the UK to more effectively invest and increase its political influence abroad.
- To ensure that economic growth occurs in order to create increasing output thus therefore increasing employment as a result. This therefore ensures that the economy is more substantial thus therefore increasing industrial growth and hence therefore the profitability of industry is maintained. This means that people gain disposable income hence allowing them to spend this in an economy thus increasing the quality of life.
- To aim to achieve full employment in order to more effectively utilise and apply human capital hence…