Please discuss the objectives of macroeconomic policy.

There are five main macroeconomic objectives: economic growth, low inflation, low unemployment, balance of payments equilibrium and income equality. Governments want the sustainable economic growth. This means that the real gross domestic product is growing, but inflation is being kept low. In the UK, the governments inflation target is 2%. It also means that the economic growth is not too harmful to the environment.The government also wants to ensure low employment, meaning that employment is increasing and all of those able and willing to work can work.Income inequality is also desirable, meaning that the country's living standards are rising, and relative poverty is falling. The balance of payments is the account of a country’s international transactions with the rest of the world, consisting mainly of the current (trade in goods and services) and the financial account. The government wants to ensure that the balance of payments is in equilibrium, meaning that if there is a deficit in the current account, there is a surplus in the financial account. If a country has a BP deficit, it means they import more goods than they export and so must borrow to pay for its imports.