Principles and Applications of Macroeconomics

Principles and Applications of
Macroeconomics

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Explanation and Analysis of Government Policy Objectives and Policies:................................3
Explanation and Analysis of Theories:........................................................................................6
Application of Policies and Theories:........................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Macroeconomics as the term suggests, involves concepts and understanding of the
economy at the macro level i.e., of an economy. It deals with the concepts and aspects relating to
performance, conduct and structure of the economy as a whole. It will involve and allow
sustainability, economic growth, reduction of unemployment rate and providing strong and
sturdy financial environment of the economy. The vital policies in the macroeconomic
environment of an economy will include monetary policies, fiscal policies and rate exchange
policies. The monetary policy will involve policies regarding stabilization of the levels of prices
and prevent more than usual variances in the inflation whereas, fiscal policy will involve policies
regarding the regulation of the expenditures of an economy or a nation and also includes
supervision of tax rates. All such policies under fiscal policy will be supervised and manipulated
by the central bank of the nation. Such fiscal and monetary policy will involve and allow the
economic development and consistency of a nation’s economy by having focus on the key
concepts of the policies of the government in macroeconomic environment like stability of the
prices, full employment, financial growth at a sustainable level and maintenance of the
equilibrium of the expenditures of the government.
The following essay will be containing and explaining the concepts of fiscal policy and
monetary policy of the government of the UK and in what manner the government will be able to
achieve the objectives of sustainable growth and reduction in the unemployment rate by
implementing these fiscal and monetary policies and other factors that will influence the chances
of success in such a macroeconomic environment. Also, theories namely sustainability theory
and Keynes’s theory of unemployment are discussed which can be applied and tested and their
effects can be explained in this macroeconomic environment.
MAIN BODY
Explanation and Analysis of Government Policy Objectives and Policies:
The key government policy objectives to be achieved through the implementation of the
fiscal and monetary policies are sustainable growth and reduction in the unemployment rate
which are explained as follows:
Sustainable Growth –
High growth and development are the primary targets for any economy but this growth
shall be achieved with the objectives of sustainable growth and development to be kept in mind.

UK government’s plan of action towards the sustainable growth involves attainment of the four
objectives i.e., fortification of environment, social equality and progress, preserving natural
resources and constant development financially. The policies and strategy of the government
towards the sustainable growth empowers the individuals with the right to healthy, safe and clean
environment (Regan and et.al., 2021). Such a sustainability can be achieved through reduction in
the poverty, unemployment, pollution and poor accommodation across the economy of the nation
and to deal with these social, environmental and economic barriers of the economy, the
government has devised two detailed agreements. And thus it can be said that such sustainable
growth will get impacted from the factors like development in the social aspect, meeting the
requirements of everyone, protecting the atmosphere successfully and effective and wise
consumption of the elements of the nature (Borland, Bhatti and Lindgreen, 2019). Global
agreement named 2030 Agenda for Sustainable Development is done to address the alarming
issues like extreme poverty, preventing the practices of inequality and injustice and leaving no
one behind.
Some of the goals of the UK government in delivering the SDGs (Sustainable
Development Goals) includes ending of poverty everywhere and in all forms, ending of hunger
and achievement of food security and improvements in the nutrition, ensuring the well-being of
all individuals of all ages along with the healthy lives, ensuring the good quality of education and
promotion of opportunities for learning to the individuals, attainment of the equality among the
genders and empowerment of all girls and women, ensuring water and sanitation to be available
and be managed for all, etc.
Reducing Unemployment Rate –
The growth and development of the nation and its economy depends upon its population
and more importantly, its working population. The part of the population which is able and
capable shall be working up to its full potential and calibre to be able to work towards the growth
and development of themselves as well as for the economy in which they are residing and
functioning. Such a motive can be addressed by the objective of the government of the UK of
reduction of the rate of unemployment (Langella and Manning, 2022). The government has
forecasted the rate of unemployment to be 4% in the year 2023. It is to be noted that the
unemployment directly affects the people of the economy as it affects their earnings and
therefore, it is the economic goals of the people that matters most to them i.e., having a good