Macroeconomic Policies And Regulate The Healthy Operation...

The government plays an important role in the national economy. Through the formulation of macroeconomic policies and regulate the healthy operation of the national economy. There are four main economic theory tells us government to achieve macroeconomic objectives: price stability, full employment, sustainable and balanced economic growth and balance of international payments. In addition, inflation, unemployment and economic growth are the big macroeconomic issues of our time. In this essay we focus on inflation and unemployment. Unemployment occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequently cited measure of unemployment is the unemployment rate. This is the number of unemployed persons divided by the number of people in the labor force (Unemployment, INVESTOPEDIA, 2010)1. number of unemployed Unemployment rate = ——————————— * 100 labor force There are three main types of unemployment: cyclical unemployment, frictional unemployment and structural unemployment. Cyclical or demand-deficient unemployment occurs when aggregate desired expenditures in the economy are insufficient to purchase the output that would be supplied when the economyShow MoreRelatedFiscal Policy, Monetary Policy, and a Healthy Gross Domestic Product1716 Words   |  7 PagesEconomic Health/Fiscal Policies and Federal Reserve/Monetary Policies Paper Understanding Gross Domestic product is central for understanding the business cycle and the progression of long-run economic growth (Hubbard O’Brien, 2011, p. 631). The GDP is defined as the value-added of all goods and services produced in a given period of time within the United States (2008). 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