Econ: Economic Goals

Economic Goals

A nation’s values and goals influence its choice of economic systems. The major economic and social goals used to evaluate the performance of an economic system are economic freedom, economic efficiency, economic equity, economic security, economic stability, and economic growth. We place a high value on economic freedom, which is the ability to make our own economic decisions without interference from the government. A society that values economic freedom gives individuals and businesses the right to make decisions about how to use their resources, without government intervention. An efficient economy makes the most of society’s resources. It delivers the goods, literally, by allocating resources in such a way that the greatest number of consumers get what they want with the least amount of waste. Because unemployed workers are a wasted resource, an efficient economy strives for full employment. A condition in which everyone who wants to work can find a job. Economic equity is the fairness with which an economy distributes its resources and wealth. People often disagree on questions of equity, which makes it a difficult goal to achieve. Economic growth is a condition in which an economy is expanding and producing more and better goods and services and is desirable because over time it leads to an improved standard of living. Every society has people who cannot provide for themselves. They may be too young, too old, too sick, or too poor  to meet all of their basic needs. A society that puts a high value on economic security seeks to provide its less fortunate members with the support they need in terms of food, shelter, and health care to live decently. This is another economic goal about which people often disagree.  No one likes economic uncertainty. Societies therefore strive for economic stability which is a condition in which the goods and services people count on are available when they want them. This includes that our jobs are there when we go to work each day and prices are predictable, allowing us to plan ahead for purchases. Most societies try to address some or all of the six economic goals. Most societies consider these goals when making economic choices. But societies differ in the degree of importance they attach to each goal. Sometimes progress toward one goal can be achieved only at the expense of another. Societies, like individuals, must weigh the tradeoffs and opportunity costs of pursuing any particular set of economic goals.

1) Chapter 3 Quiz – Friday 10/2



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