University Economics Assignment: Macroeconomic Objectives and Policies

This economics assignment analyzes macroeconomic concepts and policies within the context of the UK economy. It examines the impact of an educated workforce, the role of investment in North Sea oil, and the government's objectives of maintaining strong economic growth and low inflation. The assignment explores the benefits of low inflation, the importance of exports, and the potential for economic expansion through international trade. It concludes with recommendations for the UK, emphasizing the importance of exporting goods like gold and cars, avoiding investment in underperforming sectors like North Sea oil, and employing a skilled workforce to foster economic growth. The paper also highlights the significance of maintaining low inflation rates to achieve national economic objectives.

Running head: ECONOMICS
Economics
Name of the university
Name of the student
Author note

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Table of Contents
Case A........................................................................................................................................3
Answer i.................................................................................................................................3
Answer ii................................................................................................................................4
Answer iii...............................................................................................................................4
Case B........................................................................................................................................5
Answer iv...............................................................................................................................5
Conclusion..................................................................................................................................6
Recommendations......................................................................................................................7
Reference list..............................................................................................................................8

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Case A
Answer i
Educated workforce are always known to contribute to the growth of the growth of
the economy. The training and education of the workers of the country is one of the major
factor which determines the economy of the country. The economy of the country will be
becoming more productive when the proportion of the educated workers will be increasing as
the workers who are educated can more efficiently carry out tasks (Sperling 2017). The more
educated workers are the more they will able to handle the work which will require literacy
along with critical thinking. Therefore, it can be stated that education plays an important role
for the economic development. Well educated workforce is stated as the key to state
prosperity. For this reason, it can be also said that education is an investment. Educated
workforce will also help in attracting business to a region or a country.
An educated workforce will also enable security of the economy, promote
productivity along with morale impacts of the economy. Large amount of labour also affects
the economic growth positively. Labour is known as the human factor which is required for
producing services and goods of the economy. The business are known to use labour force for
producing goods and services which is demanded by the consumers. The main components of
the production of goods and services in the economy are the natural resource, capital, labour
and entrepreneurship (Powell 2019). Labour along with increased productivity is also known
to increase the economic growth. Increasing the workforce will also help in economic growth
of the country. Both employment and unemployment are the main drivers of the growth of
the economy. Increased number of workforce will be raising the spending of the consumers
and will also stimulate economic growth.

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Answer ii
When firms will be investing more in North Sea oil production, it will not raise the
economic growth for the United Kingdom. The reason behind this is that since the oil fields
are aging, there is no use of investing huge amount in this particular oil field. As the case
study states that despite having better qualified workers and huge amount of investment, it
have been termed as the worst performing sector (Robinson and Morgan 2016). Since
investing in the aging oil fields of the North Sea Oil will not be helping a lot. As they did not
succeed in extracting oil despite huge amount of capital investment along with qualified
workers. However, if new oil fields come up, then at that time investment will be helping to
increase the rate of economic growth of the United Kingdom.
Answer iii
The main objectives of the government of UK is to maintain strong growth and low
inflation. The moderate rate of inflation in The United Kingdom is 2 percent which is
considered to be good for the growth of the economy. There are various benefits of low
inflation since firms will be gaining confident and will also be optimistic to invest which will
help in increasing the productive capacity and will lead to higher growth of economy in the
future. Another reason is that if the rate of inflation is too high in nature the goods of the
United Kingdom will be becoming incompetitive in nature leading to the fall in exports.
Maintain low inflation rates will also prevent negative growth in the economy since it will
avoid any kind of cyclical fluctuations in the economy (McCombie and Thirlwall 2016).
When the inflation will be low in nature, it will become easier to minimise costs of changing
the lists of price.
The strong economic growth is one of the most important objective of the economy.
The strong economic growth results to increase in the real gross domestic product and for this
reason the government of the United Kingdom aims for strong economic growth. The strong

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growth also helps in increasing the living standards, creation of new jobs and improving the
tax revenues. Strong economic growth will also lead to high amount of productivity which is
the output per worker (Pollard 2018). The strong economic growth takes place due to
increase in the aggregate demand where there is rise in consumption. Government spending
and investment. The strong economic growth also takes place as a result increase in the
aggregate demand.
Case B
Answer iv
Campaigning for lifting exports will be beneficial to the economy of the United
Kingdom since UK exports known to have grown quite faster than most of the countries
recently. It have been also found out that Chile had also been one of the topmost importer of
UK. Britain should also be participating for the campaign of lifting the exports since they are
capable of selling the customer goods and services to the emerging countries (Bernanke et al.
2018). Exports will provide access to more consumers and businesses. It will also help in
diversifying market opportunities since even if the domestic market might fall, there might
have other growing markets for thee goods and services. When the business start to operate
internationally, its exports and imports will be helping the economies to expand and grow.
Export will also help UK to increase its potential for sales. As a result of exporting products,
it will help in increasing the profits. It have also been found out that the demand for coal,
cars, architects and insurance of Britain are also famous and are demanded by other countries.
Germany is also known to be one of the best export performer over the past decade for selling
capital goods like machinery to various countries like India, Brazil and China.
The economy of the United Kingdom is also highly developed and market oriented in
nature. It is also one of the most globalized economies in the world. The top exports of the

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United Kingdom are basically gold, cars, petroleum and packaged medicines. Therefore,
campaigning for lifting the exports will be benefitting the economy of the United Kingdom.
As Britain is the topmost manufacturer of cars, architects and coats, exporting them will
definitely benefitting the UK. If the United Kingdom will be increasing its exports it can
gain exposures for any new ideas, marketing techniques and management practices (Gibbs
and O’Neill 2015). Export will also help in increasing the potential for sales. Exporting
goods will also help the economy of the United Kingdom to expand its market beyond the
scope of a saturated national market (Pollard 2018). There are various advantages of the
exports, such as reducing vulnerability. Increase in exports will reduce vulnerability in the
market which states the companies will be no longer dependent on the local market.
Therefore, UK can expand its markets for attaining profit.
Conclusion
From the above case studies it can be stated that the economy of the United Kingdom
is highly developed since the government have always followed the strategy of low inflation
and strong growth. The government of the United Kingdom have always tried to maintain an
inflation rate of 2 percent. Large number of educated workers are known to contribute to the
growth of the economy. For this reason it can be said that education is very important or the
growth of the economy. It can also be stated that investment in the aging oil fields around the
North Sea Oil will not be beneficial in nature since it have been the worst performing sector
in the United Kingdom. As the case study states that despite having better qualified workers
and huge amount of investment, it have been termed as the worst performing sector (Ajmi et
al. 2015). Since investing in the aging oil fields of the North Sea Oil will not be helping a lot.
The United Kingdom is also known as one of the topmost exporting countries. The economy
of the United Kingdom is also highly developed and market oriented in nature. It is also one
of the most globalized economies in the world. The top exports of the United Kingdom are

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basically gold, cars, petroleum and packaged medicines. Therefore, campaigning for lifting
the exports will be benefitting the economy of the United Kingdom.
Recommendations
The United Kingdom should be exporting more of gold and cars since it will help
them to earn huge mount of profit. Investment in the oil fields of the North Sea Oil
production should be avoided at all means as they are the worst performing sectors. The
companies of UK should also be hiring more amount of educated workers since it will help in
the economic growth of the country. The government should also be maintaining low rate of
inflation in order to achieve economic growth of the nation.

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Reference list
Ajmi, A.N., Aye, G.C., Balcilar, M. and Gupta, R., 2015. Causality between exports and
economic growth in South Africa: Evidence from linear and nonlinear tests. The Journal of
developing areas, 49(2), pp.163-181.
Bakhshi, H. and Windsor, G., 2015. The creative economy and the future of employment.
Why the UK needs, 1.
Bernanke, B.S., Laubach, T., Mishkin, F.S. and Posen, A.S., 2018. Inflation targeting:
lessons from the international experience. Princeton University Press.
Bosetti, V., Cattaneo, C. and Verdolini, E., 2015. Migration of skilled workers and
innovation: A European perspective. Journal of International Economics, 96(2), pp.311-322.
Gibbs, D. and O’Neill, K., 2015. Building a green economy? Sustainability transitions in the
UK building sector. Geoforum, 59, pp.133-141.
McCombie, J. and Thirlwall, A.P., 2016. Economic growth and the balance-of-payments
constraint. Springer.
Nathan, M., Kemeny, T., Pratt, A.C. and Spenser, G., 2016. Creative economy employment
in the US, Canada and the UK: a comparative analysis.
O'connor, J., 2017. The fiscal crisis of the state. Routledge.
Pollard, J.S., 2018. Brexit and the wider UK economy. Geoforum.
Powell, M. ed., 2019. Understanding the mixed economy of welfare. Understanding Welfare:
Social.
Robinson, C. and Morgan, J., 2016. North Sea Oil in the Future: economic analysis and
government policy. Springer.

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Salemdeeb, R., Al-Tabbaa, A. and Reynolds, C., 2016. The UK waste input–output table:
linking waste generation to the UK economy. Waste Management & Research, 34(10),
pp.1089-1094.
Sperling, J., 2017. For-profit higher education: Developing a world class workforce.
Routledge.
Sunde, T., 2017. Foreign direct investment, exports and economic growth: ADRL and
causality analysis for South Africa. Research in International Business and Finance, 41,
pp.434-444.