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The Treasury introduces a fiscal package combining job-creation projects, targeted tax relief for low-income earners, and measures to support exports. Together, these policies are intended to promote which combination of macroeconomic objectives?
Economics
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4 stepsThe Treasury's fiscal package includes three main types of policies, each targeting specific macroeconomic objectives:
Analyze "job-creation projects."
- Job-creation projects directly aim to increase employment levels in the economy. This aligns with the macroeconomic objective of full employment.
Analyze "targeted tax relief for low-income earners."
- Targeted tax relief for low-income earners is a measure designed to shift disposable income towards those with lower incomes. This directly promotes the macroeconomic objective of redistribution of wealth.
Analyze "measures to support exports."
- Measures to support exports are intended to boost a country's export performance. A strong export sector contributes to a favorable balance of payments, which is a key aspect of external stability.
Combine the objectives and compare with the options.
The policies collectively aim to promote:
- Full employment (from job-creation projects)
- Redistribution of wealth (from targeted tax relief)
- External stability (from measures to support exports)
Comparing this combination with the given options:
- A. Full employment, redistribution of wealth, and external stability - This matches our analysis.
- B. Price stability, redistribution of wealth, and economic growth - Price stability is not a direct objective of these policies; in fact, stimulating demand could potentially lead to inflation.
- C. Full employment, economic growth, and price stability - Again, price stability is not a direct objective.
- D. Redistribution of wealth, external stability, and inflation - Inflation is generally a problem to be controlled, not an objective to be promoted.
Therefore, option A best represents the combination of macroeconomic objectives promoted by the described fiscal package.
The final answer is .
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