Macroeconomics, as a branch of economics, studies the behavior, patterns and

performance of an economy as a whole. It also deals with the structure and decision –
making of an economy. Macroeconomic objectives are goals and policies which the
government wishes to implement to ensure a smooth and successful functioning of the
economy.

Macroeconomic policies aim to increase the level of national income to the maximum
extent possible. They also aim to provide economic growth to raise the standard of
living and utility of participants who constitute the economy. Macroeconomic objectives
include less unemployment, lower levels of inflation and deflation, economic growth and
a steady balance of payments. Economic growth refers to an increase in the production
of economic products and services, compared over specific periods of time.
Traditionally, it is measured as the Gross National Product or Gross Domestic Product.
The government and its economy are deeply influenced by such macroeconomic
objectives. The two macroeconomic objectives that are extremely essential for the
government to achieve are high employment rates and lesser levels of inflation.

Employment refers to a relationship between two parties or entities, usually based on a

contract wherein one party, any corporation, not – for – profit organization, for profit or
co – operative is the employer and the other is the employee. A higher rate of
employment contributes greatly towards the working of an economy. It not just helps to
maximize the potential output in an economy but also to achieve productive efficiency. A
high employment rate helps to reduce the economic inequalities that persist in society
by preventing relative poverty. It helps reduce the rate of crimes and other such ethical
activities. It enables the firms to acquire a larger workforce and tap into a greater pool of
talent. A firm gets the opportunity to work with a diversified workforce from all works of
life which in turn becomes a competitive advantage. A high rate of employment in other
spheres eases the burden on the governments in terms of providing subsidies and
unemployment benefits. It also enables more income taxes thereby improving the
budget position.

Inflation quantitatively measures the rate at which the average price level of selected
goods and services in an economy increases over a period of time. Expressed in terms
of a percentage, inflation decreases the purchasing power of a nation’s currency. In
simpler terms, inflation refers to the general level of price of goods and services
increasing. Less or the absence of inflation increases affordability for the entire
population. It increases the purchasing power of the consumers and helps businesses
maintain long – term spending plans. It encourages businesses invest in order to
increase productivity and efficiency. Lesser inflation contributes to a stable level of
Gross Domestic Product. Lesser inflation also contributes to lesser levels of
unemployment, considerably lower levels of income inequality and lesser economic
uncertainty.

Considering the multitude of benefits that achieving these macroeconomic objectives

have for an economy, it becomes imperative for governments to take steps in that
direction. However, governments also face some hurdles in their path to achieve these
objectives.

Tackling unemployment is one of the biggest challenges especially in countries with

considerably larger populations. In order to increase the level of employment, it is
essential to have people who have the required skills for certain job positions. While
some sections of the population may be deprived of basic resources such as education,
others might simply be unwilling to apply for jobs. A large part of the population may
also not be of the required working age and hence may also not have certain skills such
as technological capabilities etc. Some firms and corporations also let go of their staff to
cut down on their costs, thereby increasing the work pressure on a certain group of
people. This leads to a dearth of viable job opportunities for a larger section of the
population.

Obtaining a level of controlled or less inflation is also a somewhat difficult objective to

achieve. Aggregate demand refers to the measurement of the total demand of finished
goods and services in an economy. It is expressed as the total amount of money
exchanged for those particular goods and services at a set price level. It is often difficult
to curb the levels of inflation as the prices of goods are not always controllable and the
aggregate demand of these goods and services is often too high. High government
expenditure and high uncontrollable consumer spending also leads to inflation to a large
extent.

There are a few ways in which the government can solve the above mentioned
problems to achieve these macroeconomic benefits. These include both fiscal and
monetary policies. Fiscal policy refers to government spending and tax policies which
impact economic conditions, such as higher aggregate demand for goods and services,
employment and economic growth. Monetary policy is the demand side of economic
policy and refers to actions taken by the central bank of a nation to control money
supply with the aim to achieve macroeconomic benefits to ensure successful and
sustainable economic growth. Macroeconomic objectives can be achieved by revising
the terms and regulations of employment; controlling the price of essential goods and
services in the market; introducing strict monetary policies to reduce inflation; providing
viable job opportunities to unemployed people; increasing business investments so that
a larger number of people are able to avail job opportunities; increasing interest rates in
a controlled manner to control inflation and by reducing tax and increasing subsidies.