Macroeconomic goals: Three conditions of the mixed economy that are most important for macroeconomics, including full employment, stability, and economic growth, that are generally desired by society and pursued by governments through economic policies. Macroeconomic goals are three of the five economic goals of a mixed economy that are most important to the study of macroeconomics. They are full employment, stability, and economic growth.
Full Employment: Full
employment is achieved when all available resources (labor, capital, land, and
entrepreneurship) are used to produce goods and services. This goal is commonly
indicated by the employment of labour resources (measured by the unemployment
rate). However, all resources in the economy--labour, capital, land, and entrepreneurship--are
important to this goal. The economy benefits from full employment because
resources produce the goods that satisfy the wants and needs that lessen the
scarcity problem. If the resources are not employed, then they are not
producing and satisfaction is not achieved.
Stability: Stability
is achieved by avoiding or limiting fluctuations in production, employment, and
prices. Stability seeks to avoid the recessionary declines and inflationary
expansions of business cycles. This goal is indicated by month-to-month and
year-to-year changes in various economic measures, such as the inflation rate,
the unemployment rate, and the growth rate of production. If these remain
unchanged, then stability is at hand. Maintaining stability is beneficial because
it means uncertainty and disruptions in the economy are avoided. It means
consumers and businesses can safely pursue long-term consumption and production
plans. Policies makers are usually most concerned with price stability and the
inflation rate.
Economic Growth: Economic
growth is achieved by increasing the economy's ability to produce goods and
services. This goal is best indicated by measuring the growth rate of
production. If the economy produces more goods this year than last, then it is
growing. Economic growth is also indicated by increases in the quantities of
the resources--labor, capital, land, and entrepreneurship--used to produce
goods. With economic growth, society gets more goods that can be used to
satisfy more wants and needs--people are better off; living standards rise; and
scarcity is less of a problem.