The objectives of government economic policy

• The government has four main macroeconomic objectives:

  1. Economic growth
  2. Minimising unemployment
  3. Price stability
  4. Stable balance of payments on current account
• Additional government objectives are:

  1. Balanced government budget
  2. Greater income equality
  3. Potential conflicts and trade-offs between the macroeconomic objectives (generally in the short run)
• Economic growth


  In the UK, the long run trend of economic growth is about 2.5%. Governments aim to have sustainable economic growth for the long run.