The five major economic goals are full employment, economic growth, efficiency, stability and equity, and they are divided into both macroeconomic and microeconomic goals. On the macroeconomics spectrum, policies are made to reach economic growth, stability and full employment. For microeconomics, decisions and policies are driven towards reaching efficiency and equity. As a whole, society's behavior aims to reach the five economic goals.Know More
At the local market and industries level, the two microeconomic goals drive business decisions and market policies. The goal of efficiency is explained by a situation where society is able to utilize available resources to achieve the maximum level of satisfaction. At maximum efficiency, no change in resource allocation would further increase societal satisfaction. Equity, on the other hand, indicates a state where wealth and income are fairly distributed. The exact definition of equity may differ somewhat depending on the political ideology of the individual.
At the macroeconomic level, the goal of full employment is achieved when available resources are used to produce services and goods. At full employment, scarcity is avoided as all production is geared towards the maximum fulfillment of needs. As an economic goal, stability is attained when there are minimal fluctuations in all market variables, such as production, prices and employment, to avoid recession or inflation. Finally, economic growth refers to an increase in the economy's ability as a whole to produce services and goods, thereby increasing satisfaction levels in society.Learn more about Economics
Economic profit is the total revenue generated by a business minus total opportunity costs. It is a more theoretical way of looking at a company's profitability that differs from the standard accounting profit reflected on the company's income statement, which simply subtracts the cost of producing goods and services from total revenue.Full Answer >
Economic disequilibrium is a state where market equilibrium is unreachable due to internal or external variables. Disequilibrium can also occur when internal or external variables result in a disruption to the balance in the market. It is also a result of long-term structural imbalances or short-term changes in market variables.Full Answer >
Economic instability refers to a community or nation experiencing financial struggles due to inflation, consumer confidence issues, unemployment rates, and rising prices. Economic instability affects businesses' ability to thrive, the cost of living, and the physical, emotional and financial well-being of consumers and families.Full Answer >
Economic diversity is a multidimensional concept that includes the products, workforce skills and capabilities in a local economy, in addition to how well that economy is able to compete in the global marketplace, according to Economic Modeling Specialists Intl. While income is an important part of economic diversity, the concept involves much more.Full Answer >