Macroeconomic objectives of the Government

By Nehal and Tae Woo

Something about macro-economical objectives

These

are aims set by the government to improve or maintain the economy of the country. These aims will affect everything from employment to interest rates.

South Korea
South

Koreas economy is facing inflation at the moment. But how is inflation caused?

High Demand

Low Supply

Rise In Prices

Inflation

South Korea: Price Stability

As

of now, South Korea is putting its top priority on price stability. South Korean government is placing its policy focus on price stability as both external and internal environments are unfavourable to contain inflation.

South Korea: Price Stability

In

terms of external conditions, international oil prices have recently risen above $100 per barrel with global raw material prices staying higher. On the domestic side, if local firms compete to raise their product prices, rising inflation could hurt people's livelihood.

How theyre trying to tackle inflation

The

Bank of Korea unexpectedly raised its benchmark interest rate to 2.75%. This would discourage people from borrowing and spending.

Interest rates rise

Lowering of Demand

Decrease of inflation

How theyre trying to tackle inflation

The

Government will cut tariff on more items than the 67 planned for this year and freeze public service charges, including on electricity and gas. Items that will see a tariff cut include coffee beans and powdered milk.

More possible ways

The

government could increase taxes. This would lower the payers disposable income and therefore spend less. The government could also control the amount of money being printed. Printing less money would mean less to spend.

India: victim of unemployment

India

as a nation is faced with massive problem of unemployment. Unemployment can be defined as a state of worklessness for a man fit and willing to work.

Problems
There

is enormous increase in the population. Every year India adds to her population afresh. Technological advancement contributes to economic development but The computerization and automation has led to technological unemployment.

To make matters worse

Since

high rates of urban unemployment would almost lead to rising crime figures and violence. Today young people are not ready to take jobs which are considered to be socially degrading or lowly. Unemployment is quite high in rural India.

Why achieve full employment?

Unemployment

wastes resources. High levels of unemployment is costly to the government: tax revenues fall and spending increases on the unemployed.

Solutions to the crisis

There

is enormous scope for raising the productivity of Indian agriculture, doubling crop yields and farm incomes, and generating significant growth in demand for farm labour.

Solutions to the crisis

Rising

rural incomes will have a mass effect, increasing demand for farm products and services, which will stimulate rapid growth of employment opportunities in other sectors.

More ways
Introduce

ways to improve existing activities that are already growing rapidly, such as nursery schools, tutorial institutes, English language teaching, etc. so that more people will be more educated and therefore be productive.

Conclusion
South

Korea: Are trying to lower their inflation rate but they should have a bit of inflation, of course at a manageable rate. India: Is trying to achieve full employment but their should be some unemployment so that employers dont have to compete to attract employees.

Thank You