Day

The aim of the macroeconomics is to explain how the economy operates as a whole by repeating the forces which determine the total production of (or the national income), the use of the factors of production, the general level of the prices and the foreign trade.

The four major macroeconomic objectives are usually:

1. A high but sustainable level of economic growth

2. A low level of unemployment

3. A low and stable rate of inflation

4. A sustainable balance of payments position.

This objective of the macroeconomics however appears difficult to reach.  

The main instruments of government policy include:

• Fiscal policy - the use of government spending and taxation

• Monetary policy - the use of money supply and interest rates

• Direct controls, e g import controls, price controls, exchange rate controls etc.