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 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 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 feasibility is the cost and logistical outlook for a business project or endeavor. Prior to embarking on a new venture, most businesses conduct an economic feasibility study, which is a study that analyzes data to determine whether the cost of the prospective new venture will ultimately be profitable to the company. Economic feasibility is sometimes determined within an organization, while other times companies hire an external company that specializes in conducting economic feasibility studies for them.Full Answer >
An economic map is a map that illustrates various economic activities or phenomena that take place in a particular area. This type of map features a variety of symbols and colors referring to particular economic activities.Full Answer >