Definition of Macroeconomics, Macroeconomic Policy, Targets,Objectives and its Conflicts

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Macroeconomics :-

 Macroeconomics is the branch of economics that studies the behaviour and performance of an economy as a whole. In focuses on the aggregate changes in the economy such as unemployment, growth rate, gross domestic product(GDP) and inflation.   


Macroeconomic policy :-

 It refers to the instruments by which a government tries to regulate or modify the economic affairs of the country in keeping view with certain objectives. "It attempts to assess the behaviour of the economy as a whole and to seek ways in which its aggregate performance might be improved".


● Policy Targets and Instruments :-


•  Targets :-

(a)- To achieve full employment at the rate of 3% unemployment.

(b)-  To achieve price stability at an annual inflation rate of 5% per annum.

(c)- To attain the growth rate of 5% per annum for the economy.


● Objectives of Macroeconomics Policy :-

(a)-  Full employment
(b)-  Balance of payment
(c)-  Price Stability
(d)-  Economic growth


●  Conflicts in Macroeconomics Policies Objectives :-


(a)- Full Employment and Economic Growth:-

When economic growth increases unemployment decreases and vice-versa.
So, we can say that economic growth is inversely proportional to unemployment.

(b)- Economic Growth and Price Stability :-
 
When economic growth increases then price increases and when economic growth decreases price decreases. 
So, we can say that economic growth is directly proportional to price.

(c)-  Price Stability and Full Employment :-
      
There were no conflict between price stability and full employment.

(d)-  Full Employment and Balance of Payment :-

Full employment is always related to balance of payment deficit. If there is balance of payment deficit, then a policy of reducing expenditure will reduce imports but it will lead to increase in unemployment in the country.

(e)- Price Stability and Balance of Payment :-

There were no conflict between the objectives of price stability and balance of payment in a country.

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