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Discuss various goals of an economic policy

Discuss various goals of an economic policy.

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Goals of an economic policy consists of valued judgment and what economic policies should strive to achieve.

They include;

1. Attaining economic growth.

2. To attain full employment; a situation where every member of labour force is able and wants to work. It is situation where all resources are fully utilized.

3. To attain price stability

Economic policies aim at preventing general increase in price level/inflation as well as decrease in price level/deflation.

4. To eliminate unfavourable public budget deficit which is favourable in attainment of economic growth- this can be attained through fiscal policy which involves use of government revenue. Fiscal policy deals with government actions regarding taxation and spending.

5. To sustain low and stable price growth.

This is possible through implementation of monetary policy. Monetary policy deals with Central banking actions regarding money supply and interest rate.
Most factors of economic policy can be divided into fiscal and monetary factors/policies. Such policies are often influenced by international institutions for example World Bank and IMF as well as political beliefs and the consequent policies of political parties.

6. To attain an increase in productive capacity of the economy for example increasing the level of production in various sectors such as manufacturing. This requires efficiency and effectiveness in the field of production. In order to attain a higher level of efficiency, the labour force ought to have the necessary levels of skills.

7. To achieve a sustainable industrial growth.

This can done through implementation of industrial policies. An industrial policy is an official strategic effort to encourage the development and growth of all or part of manufacturing sectors as well as other sectors in the economy.

8. To attain economic stabilization

This is the result of governmental use of direct/indirect controls to maintain and stabilize the nation's economy during emergence situations. The direct and indirect control measures employed by government include setting and freezing of wages, prices, rent or rationing of goals.

9. To grow the level of international trade through the development and implementation of appropriate trade policies. These policies deal with questions on trade, finance and monetary policy.
A country ought to work together with international financial institutions for financial assistance.

Dullayo answered the question on May 6, 2018 at 18:43

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Discuss various goals of an economic policy

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