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Main objectives of government macroeconomic policy are often asserted to be full employment, stable prices, balance of payments equilibrium and a high growth rate. Consider some of the difficulties facing a government in its attempt to attain these objectives. by Mind Map: Main objectives of government macroeconomic policy are often asserted to be full employment, stable prices, balance of payments equilibrium and a high growth rate. Consider some of the difficulties facing a government in its attempt to attain these objectives.
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Main objectives of government macroeconomic policy are often asserted to be full employment, stable prices, balance of payments equilibrium and a high growth rate. Consider some of the difficulties facing a government in its attempt to attain these objectives.

Full employment

Challenges based on type of Unemployment

Challenges to reach full employment

Tradeoff: BOP equilibrium

Stable Prices

Tradeoff: Full employment

Evaluation

Balance of Payments equilibrium

Challenges/ conflicting goals

High growth rate

Challenges/ conflicting goals

Conclusion

Most important objective

Choices have to be made between objectives i.e. there exist trade-offs between them

Reduced inflation= improved BOP=Improved equity

Higher growth=lower unN

Whether objectives conflict depends on types of policies used

Depends on state of economy