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Macroeconomic Objectives and their Importance to UK Economy - Essay Example

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This essay comprehensively reviews macroeconomic policy of the UK government and assesses its effectiveness. The policy is designed to deliver the intended macroeconomic objectives, which include stability. The government is also increasing product flexibility, capital and labor markets…
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Macroeconomic Objectives and their Importance to UK Economy
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Download file to see previous pages Low Inflation The emerging objectives and macroeconomic framework has is expected to deal with challenges that come from inflation and economic uncertainty. The inflation is the United Kingdom stood at 2.4 percent at the beginning of 2013. This has been occasioned by a fall in price of diesel and petrol. The price seems to have temporarily stabilized. The energy costs have declined. This includes housing, recreation and culture goods. The macroeconomic framework is based on transparency, responsibility and accountability. The aim is to ensure that the government works through clear objectives for fiscal and monetary policy. The government of UK believes that constrained discretion can help in meeting long term macroeconomic grows. Under this framework, the government of United Kingdom is expected to meet the objectives simultaneously (Greener 2001). This approach is boosted by the fact that some of the objectives and complementary and interdependent with each other. Balance of Payment This occurs when an induced balance of payment transactions is zero. In this case, the government of the UK is responsible for influencing the exchange rates. The government is determined to ensure that the imports to not exceed the exports. This is done through avoiding fixed exchange rates and promoting a culture that is more productive that consumptive. The government hopes to control the exchange movement given the exchange rates is flexible. This might prevent the sterling from depreciating further. Balancing is payment equilibrium affects the holding of foreign exchange with affects the local economy. The government is developing a policy that ensures maintenance...
This essay is one of the best examples of analysis of the main directions of the macroeconomic policy, carried out by UK government. Macroeconomics refers to aggregate activities carried out by government, individuals or the government. Objectives are the aims of the policy being used by the government. The government of the United Kingdom targets a consumer index of over 2 percent. The government also intends to ensure sustainable growth through maintaining low inflation and ensuring proper control on the environmental growth. The UK government has an objective of ensuring high levels of employment through increasing opportunities for full employment.
The government is developing a grand macroeconomic policy framework that defines the roles of the major economy sector and how they can strengthen the competitiveness of the UK economy. The sectors include financial and housing. The policy intends to manage consumption. After the consumption boom, the domestic market created a strong demand that caused the UK exports not to grow as fast as expected. The State is acknowledging its failure in having a reformed policy. The plan by the government to develop a comprehensive macroeconomic framework states when and how the objectives are going to be achieved. It is possible to achieve the objectives if the steering committee remains flexible and responsive to economic dynamics. The macroeconomic policy framework intends to use better metrics and real median incomes in assessing the economic policies and objectives.
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