tailieunhanh - Ebook Reading and understanding economics: Part 2

(BQ) Part 2 book "Reading and understanding economics" has contents: Fiscal policy, the international business environment, financial markets, financial institutions, featuring the demise of bear stearns, money and interest rates,.and other contents. | 12/11/08 15:15 Page 107 Part B Macroeconomics Topic 9 Macroeconomic policy: unemployment, inflation and growth 109 Topic 10 Money and interest rates 133 Topic 11 Fiscal Policy 145 Topic 12 International Economics – balance of payments and exchange rates. 151 Topic 13 The international business environment 169 12/11/08 15:15 Page 108 12/11/08 15:15 Page 109 Topic 9 Macroeconomic policy: unemployment, inflation and growth In the first topic we saw that macroeconomics looks at the economy as a whole and sets out the bigger picture. For this reason it generally concerns governments much more than individuals until the point when the management of the economy runs into severe difficulties, at which stage it affects ordinary people. The various topics that form the basis of macroeconomics dominate the news programmes and the newspapers each day. The performance of the national economy at a macroeconomic level is the principal concern of most governments, which can be illustrated by examining their main economic policy goals: 1. Economic growth The level of economic growth is a major focus for governments because this is how the changing level of national income is measured over time. It is generally assumed that it is desirable to target ever-rising levels of income to enable the population to constantly improve their living standards through the purchase of more goods and services. 2. Low inflation It is also considered to be important to keep the general level of price inflation at a low and predictable level. This will allow individuals to plan their consumption without the danger of rising prices making goods and services too expensive. The other extreme is deflation when there is a fall in the general level of prices. This is also something that governments try to avoid because consumers stop .