The objectives of macroeconomics policy objectives are stable economy, it means with low inflation, a sustainable economic growth it means that the economy can be managed, highlevel of employment, rising living standards, sustainable balance of payments, (E=exports, M= imports) it mean that the exports and imports are the same level, due to when there are more EM= is asurplus, and the sound(spending) government, their finance, it means with low deficit.
An economy is a system which attempts to resolve the basic economic problem of scarce resources in a world of infinitewants. (Anderton, 2008)
Why is the UK government cutting budgets? First of all, budget cuts is The amount by which a government, company, or individual's spending exceeds its income over aparticular period of time, also called deficit or deficit spending.
There are four areas of policy: the monetary policy (money supply, interest rates), the fiscal policy (taxation, government spending“budget”), the supply side policy (about aggregate demand), and direct control (the regulation of the economy).
The table below explains were the government is spending the money.
In 2009-10 the Governmentspent £671.4 billion, despite tax revenues of only £496.1 billion.
And there is where the problem is, in the current spending plans, they are spending more money than what they receive from taxation,but now as UK is going through a deficit, they are implementing taxes, but many companies, as private sector are firing workers, so there is when the unemployment starts, as we know there will alwaysexist seasonal and frictional unemployment, but in this case is due to the business cycle when the government starts the resection, banks are not lending money to the private sector so no new...