Learning Outcomes being assessed: I. Describe the main objectives of macroeconomic policy 2. Measure the United Arab Emirates National Output and National Income and understand cures of inflation and...

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I. Describe the main objectives of macroeconomic policy.
Answer - Macroeconomic policies are concerned with the overall position and scenario of the
economy rather than analysing the growth pattern and behaviour of an individual business unit.
Macroeconomic policy implications are more inclined towards the success pattern and growth of
the economy in terms of GDP and changes in the trend of other important macroeconomic
measures. It has been established by the modern policy makers that macroeconomic policies to
e implemented over the economy should have clear goals and objectives so that problems of
growth and business cycle can be removed in a comprehend manner from the roots. Following
are the few objectives of the modern macroeconomic policies which should be attained through
various macroeconomic tools.
1. Stable and sustainable economic growth and development
It means the growth and performance of the economy should be sustainable in the sense that
national income can keep on growing viably in the long run. Also, the development of the
economy should be in such a way that other macroeconomic issues can also be resolved in a
significant manner. However, such desirable goals of growth are different for developing and
developed economies because the priorities and primary goals are not same for both. For
instance, developing economies are more concerned about population longevity and maintaining
the standard of living along with longevity of population age.
2. Stability in prices
When the inflation rate is according to the target rate of monetary policy which is estimated to be
around 2% per annum, there is stability in the prices and a symbol of growth for the economy.
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3. Employment level – When people work for earning their living on voluntary basis
productively, it is said to be employed and attaining full employment is the goal of the
macroeconomic policies.
4. Maintaining positive balance of payments with its trading partners helps in establishing the
trading relations and earning foreign exchange through balance of payments at world level.
5. Environmental concerns – Environment being an important asset for the country should not be
misused and overused in any way and for this macroeconomic policies are constructed to protect
and regenerate the renewable resources by the government agencies.
6. Reducing the income gap between the rich and poor should be reduced in a positive form so
that it does not kill the incentive of the educated and capable people to work hard and generate
more income.
7. Sound public finance structure – Government spending is done to reduce the spending by the
consumers and capital formation is done to generate higher aggregate demand through
productive activities. Controlling public debt and maintaining government expenditure at
adequate level are the prime concerns of macroeconomic policy matters (Macroeconomic policy
objectives, 2016).
2. Measure the United Arab Emirates National Output and National Income and understand cures
of inflation and unemployment on personal decision making.
Answer – UAE has shown great transformation through large scale trading of...