Economic Goals

Economic Goals

Although the GDP has been used as an indicator of the wellbeing of various nations, its raise should not be the priority of governments. It measures the economic performance of a country using the cost of final services and goods in the market (Williams). GDP fails to measure some essential things in an economy that cannot be monetized. For instance, a clean atmosphere is not counted in the Gross Domestic Product. As a result, there might be a scenario where the air is entirely polluted by industries, making it dangerous for inhabitants in that area. At the same time, the GDP might continuously be increasing. Residents will be suffering from the contaminated air at the expense of ensuring that industries maintain high productivity. By focusing on the GDP, the actual state of a nation’s health condition is neglected.

Scholars have also advised that GDP should be taken as an estimation of economic transaction and not as a reflection of people’s standards of living. Such a conclusion was arrived at after economist analyzed this goal and found its downfall.  Most societies aim at ensuring that residents there have equal opportunities and wealth. However, we are living in a generation where there is an ever-escalating difference between low class and high class. The poor are sinking deep in poverty with time as the rich are gathering more and more wealth.  If much focus is put on GDP, then this issue will never be noted leave alone being addressed. Therefore to ensure that poverty is eradicated and wealth is equally distributed societies should not prioritize on maximizing GDP but rather attend to other economic goals.

Other economic goals that are important include:

Full employment

Full employment does not imply that everyone has a job; the existence of a country that has no jobless individual is unrealistic. What it means is that no person in the country is voluntarily unemployed. Despite the uncertainties of economic imperfections the government has to ensure that the level of unemployment is at its minimum. The government should take this goal with much weight as by reducing the number of people without jobs the level of violence and crime decreases.

Economic growth

Economic growth is the maximization of productivity. Often endowments available in a nation are scarce and therefore should be used efficiently and effectively to produce excess output to cater for the desires of the entire population. At the same time, the generated output ought to be of high standards, and it becomes quite a challenge to satisfy the rapidly increasing people of a nation. Economic growth is attained when production has increased due to efficient utilization of the existing recourses. Pursuing this goal is vital as it avoids waste of potential and it also guarantees the equal availability of wealth for citizens.

 Price Stability

Price stability is another economic goal that every government should maintain. When the prices of goods and services are unstable, there is a tendency of inflation affecting the economy. The danger of this menace is that it causes wealth in the economy to be distributed unfavorably and unequally. As a result, it reduces the growth rate since potential investors are scared off by uncertainties. Additionally inflation also negatively affects purchasing power and cause a deficit in the BOP which will have an adverse impact on the international reputation of a nation. The stability of prices should be pursued for a country to maintain a favorable balance of payment.

Works Cited

Williams, Ray. “Why the GDP Is Not An Good Measure of A Nation’s Well Being.” Psychology Today, 12 Sept. 2013, www.psychologytoday.com/blog/wired-success/201309/why-the-gdp-is-not-good-measure-nations-well-being. Accessed 23 Nov. 2017.

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