Economic Goals are part and parcel for the growth of any economy. As individuals we cannot satisfy all of our economic wants. Therefore, we must make choices. The same is true for the nation. As a group we decide what those choices will be. Through the years we have established certain national economic goals with which most people agree. Though individuals may differ On the order of importance, we agree as a nation that we should strive for the following:
- Economic freedom.
- Economic efficiency.
- Economic growth.
- Economic stability
- Economic opportunity
- Economic security.
When people are free to make they must decide what they want and then they must set their goals. As we said before, the real or opportunity cost of any choice is what people must give up to gain what they want. For example, you might have to decide whether to spend money for a vacation Or for more education; to buy shoes or a suit; to make a down payment on a house or to buy a new car. To make wise decisions, you must think carefully about the value of each choice. Individuals have the economic freedom to make their own choices when satisfying their economic needs and wants.
It means making the best use of your limited resources—land, labor, capital (tools and machinery), and management. For example, a farmer can use land to produce either corn or wheat. The farmer must also determine the right amount of lime and fertilizer to use, the crop rotation schedule, and other conservation practices necessary to yield the greatest profit over a period of time. The combination of resources that produces the most or the best products is considered to be the most efficient economic mix.
Most people expect to be better off than their parents, and for the most part, this is a reasonable goal. As a result of increases in our technology, our capital supply (tools and equipment), and our education, we have been able to produce more goods and services for each person. We generally accept the notion that the amount of goods and we are able to buy will increase. This is economic growth.
This goal represents a desire for a high level of employment without inflation or deflation. Inflation exists when there is a rise in the average level of prices for goods and services in the economy without a corresponding increase in the production of goods and services. During inflation the dollar loses much of its value. Inflation is hard on people with fixed incomes—for example, retired people—and on people who loan money. Deflation exists when the average price level falls. Deflation is equally undesirable in that it brings about increased unemployment and a waste of economic resources. Americans want neither inflation nor deflation; we want economic stability, which is few ups and downs in business activity.
Wealth consists of tangible goods that have monetary value because they are useful, desirable, and relatively scarce. Our wealth is made up of the things we own at a given time. Most people acquire wealth by working to earn an income. Other forms of income include: interest on savings; rent from an apartment building; or payments such as social security or private pensions, which are called transfer payments. A transfer payment is income received from government, business, individuals for which no goods or services were produced. Most people want to acquire more wealth—they want to own more land, buildings, and personal possessions. This wealth is usually acquired by working to earn an income and by investing successfully. Everyone has the right to earn an income or to invest to acquire wealth. This is known as economic opportunity.
People want always to be able to buy the economic goods and services to meet, at least, their basic needs. This is called economic security. Programs designed to create economic security include: care for the aged (such as Medicare and social security); support for the unavoidably unemployed (such as unemployment insurance); and aid for depressed areas (such as urban redevelopment).