Answer :
The three goals of macroeconomics are economic growth, low unemployment, and price stability. These goals are measured using various indicators and metrics.
Economic growth is typically measured by the gross domestic product (GDP), which quantifies the total value of goods and services produced in an economy over a specific period. Unemployment is measured by the unemployment rate, which calculates the percentage of the labor force that is actively seeking employment but unable to find it. Price stability is monitored through inflation rates, which measure the change in the average level of prices for goods and services in an economy.
The first goal of macroeconomics is economic growth, which refers to an increase in the production and consumption of goods and services in an economy. It is measured primarily by the gross domestic product (GDP), which is the total market value of all final goods and services produced within a country in a given time period. GDP can be calculated using different approaches, such as the income approach, expenditure approach, or production approach. By comparing GDP figures over time, economists can assess the rate of economic growth.
The second goal is low unemployment, aiming to achieve a situation where a significant portion of the population is employed. The unemployment rate is a common measure used to assess this goal. It is calculated by dividing the number of unemployed individuals by the total labor force and multiplying the result by 100 to express it as a percentage. This rate provides an indication of the proportion of the labor force that is jobless and actively seeking employment.
The third goal is price stability, which involves maintaining a low and stable inflation rate. Inflation refers to the general increase in prices over time, eroding the purchasing power of money. Inflation rates are measured using various indices, such as the Consumer Price Index (CPI) or the Producer Price Index (PPI). These indices track the average changes in the prices of a basket of goods and services consumed by households or the prices of goods and services at the producer level, respectively. By monitoring inflation rates, policymakers can take measures to control inflation and ensure price stability.
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Final answer:
The three main goals of macroeconomics are economic growth, low unemployment, and price stability.
Explanation:
The three main goals of macroeconomics are economic growth, low unemployment, and price stability. Economic growth refers to an increase in the production of goods and services over time. It is measured by the growth rate of Gross Domestic Product (GDP), which is the total value of all final goods and services produced within a country's borders in a specific period of time.
Low unemployment means that a small percentage of the labor force is without a job. The unemployment rate is used to measure this goal and is calculated as the percentage of the labor force that is unemployed and actively seeking employment.
Price stability aims to keep inflation at a low and stable level. Inflation measures the increase in the average price level of goods and services in an economy over time. It is usually measured using the Consumer Price Index (CPI) or the Producer Price Index (PPI).
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