All the countries around the world have certain targets for becoming an ideal and economically stable nation. Countries strive hard to achieve such targets or goals. Each country has its own issues associated with various factors that halt its development and growth. These goals form the foundation of economic policies and guide governments in their decision-making processes.
In this blog post, we will explore the basic economic goals pursued by countries worldwide. By understanding these objectives, we can gain insights into the fundamental principles that shape economic policies and drive national development. Such goals are referred as Macroeconomics objectives. Following are the economic goals of a country in general.
1. Economic Growth
Economic growth refers to general increase in real output. Every country utilizes its scarce resource effectively and efficiently to produce maximum goods and services in order to fulfill the needs of its masses. It is the upmost priority of every country to produce goods and services of such nature which meets the standards of quality.
Additionally, It is the biggest challenge for every country to fulfill the needs of its growing population and then also export its products to the rest of the world.
Real growth means the increase in the production of goods and services which is only possible when existing resources are being allocated efficiently. Those countries which could not achieve the economic growth are because of two factors.
- The resources might be used inefficiently, or
- Factors of production might be lying unemployed.
- The factor which promotes economic growth includes the following;
- Improvement in technology
- Increase in natural resources
- Increase in the labor force
- Increase in human capital
The following graph shows the growth. When the available resources are utilized wisely than the output of machines increases as a result of which the combination for goods and services (P, Q, and R) on production possibility frontier (PPF) is shifted towards the right (from PPF1 to PPF2) without any opportunity cost which shows growth.
2. Full Employment:
Ensuring full employment and minimizing unemployment is another essential economic goal. Governments strive to create an environment where all willing and able individuals have access to productive employment.
Full employment does not mean that no one is jobless in a country; rather full employment refers to the situation when there is no voluntary unemployment in the country. There is always a certain level of unemployment in the country due to economic instabilities and imperfections. Such level of unemployment is called the natural rate of unemployment. But the government tries its best to reduce the level of unemployment in a country as much as it can.
It is one of the most important responsibilities of the government of a country to create job opportunities for its people. Policies aimed at reducing structural unemployment, promoting job training and skill development, and encouraging labor market flexibility are implemented to achieve this goal.
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3. Price Stability or Controlling Inflation:
Inflation means a general increase in price level. Increase in price level results in an unequal and unfavorable distribution of wealth in an economy. Due to inflation the growth rate also decreases. It reduces purchasing power and it also causes a deficit in the balance of payment which effects the international repute of the country. Therefore, the government of a country takes a serious and effective step to overcome inflation and to keep the prices of commodities stable.
Read:
- What is Inflation?
- Types of Inflation
- The economic impact of inflation
- Anticipated and unanticipated inflation
- Difference between inflation, deflation, and disinflation
4. The balance of payment:
A balance of payment is the statistical record of economic transactions with the rest of the world. Economic transactions refer to international trade that includes the import and export of goods and services. Where imports increase the exports the balance of payment becomes unfavorable. If the value of imports is greater than the value of exports, then the balance of payment is in deficit. On contrary, if the value of export is greater than the value of imports than the balance of payment is in surplus. A balance of payment deficit in disadvantageous to the country. It affects the credibility, repute, and ranking of the country. In order to keep the balance of payment favorable, the government imposed duties on imports and provides subsidies on exports.
5. Economic Security:
Economic security refers to a feeling of freedom and safety. The people of a country feel themselves safe no matter wherever they are in their homeland. It is the responsibility of the government of a country to provide security of life and belongings of their people. That is why government establishes defense including police for the protection and security of the natives.
6. Economic Freedom:
Economic freedom is a freedom for people to make choice and decisions without any kind of external pressures. People are free to buy, sell and own. People are free to own property and make profits from them. People have the freedom to do business and expand or contract it.
Economics freedom is provided to people to promote economic activities in an economy to make economic condition better day by day.
7. Economic Efficiency:
Efficiency is measured with respect to a time frame. One is efficient if he does maximum work in less time. Economic efficiency is the best utilization and allocation of available resources. An economy is economically efficient when there is maximum benefits are available for the people.
Economic efficiency is achieved when available resources are used wisely in such a way maximum goods and services are being produced. An economically efficient country is more favorable internationally. Other countries rely on such country’s quality productions and services.
8. Economic Equity:
Economic equity is one of the economic goals of a country to treat everyone equally and fairly and do justice. It is the duty of government to keep balance and equity among different classes of society. The government should form and establish such economic policies which help them in minimizing the class discrimination in the society. The country with less discrimination flourishes with better speed.
In order to achieve the goal of economic equity there should be fair and just distribution of income. The wealth should be accumulated or concentrated in certain hands. Every sector of an economy must be audited on regular basis so that cash flows could be regulated. Economic equity is very integral part because it helps the business chains to keep functioning smoothly.
9. Economic Stability:
Every country is required to pay maximum attention towards keeping the prices of goods and services stable. The government should formulate such policies which prevent price fluctuations and they the markets in balance and consistency. Economic stability also includes full employment level in the country, which no one is jobless unless he himself does not want to be employed. An economically stable country is the one which is heading towards growth and prosperity, slowly and steadily.
Measures such as progressive taxation, social welfare programs, access to quality education, and healthcare initiatives are employed to alleviate poverty, reduce inequality, and promote social cohesion.
