Ch21 Macroeconomic Policy Aims

Front

What are the usual aims of a government's domestic macroeconomic policy?

Back

Price stability, low unemployment, and economic growth.

Front

What is a typical inflation target for a central bank?

Back

2% to 3%.

Front

Who usually sets the inflation target?

Back

The government.

Front

Why is an inflation target set by the government?

Back

To make the central bank more accountable in its implementation of monetary policy and to advise employers and workers of the likely target for wage increases.

Front

What does low unemployment mean?

Back

A low proportion of the labour force is unemployed.

Front

What are the benefits of economic growth?

Back

Increase in output and employment, and an improvement in living standards.