Macroeconomics: Importance of Government Policies in Boosting Economic Condition

Macroeconomics
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Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Define and illustrate why governments utilise macroeconomic plan to boost economic
condition, using examples. During last ten years, how effective have UK administrations
been, and also what obstacles do they still face?....................................................................3
Recommendations................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Macroeconomics deals with the issues such as unemployment, scarcity of resources and
price instability. Unemployment, hunger levels, taste, and other indicators of human wellbeing
are all indicators of macroeconomic and challenges in the international market (Ahmed Khan and
Siddiqui 2020). These are policies that are related to activities that take place across the entire
country, with the primary vision of attaining macroeconomic aims and outcomes through the use
of such policy tools. The macroeconomic policy is significant for the providing the stability in
the environment of the economy for fostering the sustainability and the economy growth of UK.
These enable the country to control the economic fluctuations in the economy.
The concept of economic welfare is also discussed in this report. Economic welfare or
community surplus is a concept of allocation of resources to the society in such a way that it
positively affects the society. The economic welfare is maintained by the government of UK by
improving the productivity of the nation by making and modifying new macroeconomic policies.
Also the objective is to provide a stability in term of employment and people become
independent in serving their country (Andréosso-O'Callaghan, Moon and Sohn 2021).
This essay contains the basic understanding of the macroeconomics and its significance. It
also entails the economic system followed by the UK for the welfare of the nation. Further, the
polices of macroeconomics are elaborated in the report by growing the sustainable behaviour of
UK. Moreover, the pros and cons of these polices are descries in the context of UK by effectively
using the 10 years’ quantitative data of these policies. Also, the challenges that are faced by the
government are elaborated and recommendations are provided on this basis at the end of the
essay.
MAIN BODY
Define and illustrate why governments utilise macroeconomic plan to boost economic condition,
using examples. During last ten years, how effective have UK administrations been, and
also what obstacles do they still face?
Economics is majorly divided into two categories: Micro and macroeconomics. Micro
economics is branch of economics that deals with the individual demand, supply, cost, revenue
and other factors of production. Whereas macroeconomics deals with the aggregate demand and
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supply of the complete market. Macroeconomics is the study of overall demand, supply and
several other factors of production. There is a significance of macroeconomics which helps in
maintaining the price stability of the economy. The application of macroeconomics is very broad
because it includes the estimation of Gross national product. The macroeconomics helps to settle
the fluctuations of the prices in the economy. The level of output produced in the economy can
also enhanced by applying the macroeconomic policies. The equilibrium level of balance of
payment can be attain by using the approach of macroeconomic policies. It is defined as the sum
total of all the goods and services produced in an accounting year. It is a field of economic
principles that analyses the entire country's economic efficiency and competitive placement on a
larger scale. The economic policies growth is further subdivided into fiscal, procurement, and
financial policies, and other federal policies that benefit these policies towards developmental
process, including such industrial, environment, and competitiveness policies. Macro
environment is indeed the part of economics concerned also with overall level of economic
activity. It shows how macroeconomic functions are performing and describes how income
distribution and jobs are measured using producers and consumers aggregate in the country.
Macroeconomic indicators aids in achieving the intended growth objectives for a country by
enhancing the amount of employment and economic growth, lowering output level and many
more. The impact of macroeconomic policy on the business in process of reaching aims and
targets is examined in depth in this essay. The categories of macroeconomic policy covered in
this essay include monetary, fiscal, and exchange rate policies. These programs have various
advantages and disadvantages that are explored in detail, demonstrating the relevance of
macroeconomic in a country's progress and expansion. Formulation of economic policies can be
done with the help of complete understanding of the macroeconomics (Anne and Purwono
2018). Every economy deals with problem of scarcity of resources. There are several uses of the
resources but it is limited. There are several purpose of macroeconomics which can be explained
as given below –
Increase the level of GDP: It can be termed as sum of products and services produced in an
accounting year. The macroeconomics helps to achieve the higher level of GDP of the economy
which contributes in growth of the economy. Fair income distribution: Every country faces the
issue of unequal distribution of wealth in the economy. It creates a problem of disparity because
poor are becoming more poor and rich are getting wealthier.
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