INTRODUCTION: In most industrialized economies government is a significant player in the economy and performs several functions. Firstly, it tries to engineer certain economic outcomes for the economy as a whole; these are called the macroeconomic objectives (or aims). There are 5 of these and you have probably guessed that they tend to work against one another (in the Newtonian sense for every action there is an equal and opposite reaction!) as a result economists must tread a fine line and prioritize between competing aims and accept that trade-offs are likely to occour. Government is not only a would be engineer of the macroeconomy but also a significant producer, consumer, employer and regulator too. As a result an understanding of the governments role in the economy is crucial to a good understanding of how the macroeconomy operates.
Introduce the '5 Macroeconomic Objectives'
Understand the multiple roles and functions of government in modern mixed economies, including as an employer, producer, consumer and regulator.
Distinguish between the functions of government local, national and internationally.
Describe the 5 macroeconomic objectives of governments.
Analyse the reasons behind the choice of aims and the criteria that governments set for each objective.
Discuss the possible conflicts between government objectives; including full employment V. stable prices, economic growth V. balance of payments stability, and full employment V. balance of payments stability
ACTIVITY 1: Read through pages 268-271 of Oxford (3rd edition) or the Kognity textbook and completing the following table take notes for column 2. When you have done this for each role of government find examples of this for 2 countries. Your teacher may give you examples but you will need to research the details and the specifics.