Macroeconomic objectives PART 1

Which of the following government objectives is the most likely to be achieved in the short-run?

• Significantly more equitable distribution of income

• Reducing regional differences

• Price stability

• Full transition to renewable energy sources

Which pair of macroeconomic objectives may conflict with each other?

• Improve international competitiveness & increase in real GDP

• Price stability & higher standards of living

• Improved access to public services & reducing national debt

• Increased government revenues & reducing regional differences

Which of the following objectives are the least likely to be achieved during a period of strong economic growth?

• Increase in real GDP

• Price stability

• Falling unemployment

• Improved work-life balance

Why may some people oppose pursuing the objective of environmental sustainability?

• May reduce economic growth

• May reduce international competitiveness

• May reduce air pollution

• May reduce the rate of inflation

Which statements are true?

I. Higher incomes per capita can result in greater income inequality.

II. Price stability always results in cheaper prices.

III. Improving well-being must conflict with increasing real GDP per capita.

• I.

• II. and III.

• III.

• I., II. and III.

What can make it difficult for a government to improve people's access to public services?

• A small national debt

• Many rural areas

• Strong economic growth

• High unemployment

Which one is an argument against the reduction in income inequality?

• Reduces the differences between cities and the countryside

• Reduces the unemployment rate in the country

• Reduces government spending on the poor

• Reduces the incentives to take risk and innovate

Why may a country focus on improving its global competitiveness rather than on reducing unemployment?

• The country has high cost of living.

• The country is a large trading hub.

• The country has strong a welfare system.

• A large part of the population lives in poverty.

A government is attempting to reduce regional differences in the country by infrastructure spending. Which negative consequences may the country face?

• Increased budget deficit.

• Improved regional employment.

• Increased price level.

• Reduced income inequality across regions.

Which ones can be considered negative consequences of a reduction in the unemployment rate?

• Increased in the price level due to higher spending

• Greater use of government services paid through the higher tax revenues

• Sustained economic growth due to higher consumer spending

• Increased in the numbers of working hours by single parents.