Objectives are the goals / targets of government policy
There are 4 main macroecomic objectives:
High employment – the government wants to achieve an increase employment and eventually a situation where all those able and available can find meaningful work
Stable low inflation – the Government’s inflation target is 2.0% for the consumer price index.
Sustainable growth – growth of real gross domestic product – sustainable at around 2.5%
Satisfactory balance of payments – internationally competitive (exports = imports)
Instruments are the means by which these objectives might be achieved
The main policy instruments available to meet macroeconomic objectives are:
Monetary policy –changes to interest rates, the supply of money and credit and also changes to the value of the exchange rate
Fiscal policy – changes to government taxation, government spending and borrowing
Supply-side policies designed to make markets work more efficiently
Other Macroecomic Objectives
Rising living standards and a fall in relative poverty – cutting child poverty and reducing pensioner poverty.
Sound government finances – including control over state borrowing and the total national debt