There The aim is not for 0% inflation, because the idea .

there will always be people that prices will always rise means consumers will spend money
‘in-between’ jobs, or whom don’t have the
required skillset, and who need retraining.
UNEMPLOYED LABOUR is a loss of
potential GDP for the economy, also the
unemployed workers will need to be
supported by government revenue which
has an opportunity cost.
today rather than postpone spending which lowers GDP and
increases unemployment, hence a is usual.
Stable & predictable prices means households, businesses
and governments can better plan future spending. Investments
exports relative to buying imports, it means
can be made as the future value of money is more certain.
the stability is desired because when a
country buys more imports than it sells in
exports it needs to borrow the difference
which leads to debt and if it sells too many
they have less goods for consumption and
living standards suffer
Governments would
prefer a balance,

that will result in greater

The market system
alone ONLY rewards the
owners of productive factors of
production eg, if your labour is
educated and healthy then you
can earn a good wage, however
if you are poor, without access
to education and healthcare
then you can’t earn much
income. This can create an
‘INCOME-GAP’, which can lead
to ‘Social unrest’. In addition,
the more educated the
population the greater the
level of output and economic
growth, which improves
everyone’s standard of living.
The government
by
taxing the rich heavily and providing
generous benefits to the poor as this will
disincentivize people from working hard and
seeking work. The goal is to give everyone,
regardless of income level’ equal access to
education and healthcare as well as income
to afford the basic necessities in life.
productivity and contribute to greater
export competitiveness in the future
Potential productive capacity is
always increasing due to population growth
and advancements in technology which
improves productivity, therefore governments
will always
as possible.
Economic growth, refers to increases in the value of a country’s
output (GDP) which is equal to its total spending on domestic output by
households (C) , firms (I), the government (G) and foreigners when they
buy exports (X), minus any spending on imports (M). Governments aim to
increase this as more output results in and and
. In addition more business activity results in
which the gov’t can redistribute to ensure low
income people have access to better education and healthcare, which will
further improve the productivity of the economy.