Government Policy Aims in Economics

Steps:

• Recall that government policies target macroeconomic objectives like growth, employment, and stability.
• Identify aims as desired outcomes, not tools or problems.
• Match choices to standard goals: stable prices align with inflation control.
• Eliminate options that are instruments (taxes, rates) or issues (unemployment).

Why C is correct:

• Stable prices is a core aim of monetary policy, defined as low and stable inflation to ensure economic predictability, per frameworks like the Taylor Rule.

Why the others are wrong:

• A: Income tax is a fiscal tool for revenue, not an aim.
• B: Interest rates are a monetary instrument set by central banks, not a policy goal.
• D: Unemployment is an economic problem to reduce, not an aim.

Final answer: C