Government Macroeconomic Objectives

Steps:

• Identify core goals of economic policy: stable growth and price stability.
• Recall that governments aim for higher output to boost living standards without causing runaway prices.
• Evaluate options against standard aims like GDP growth and inflation control.
• Select the pair matching these priorities.

Why A is correct:

• Economic theory defines key aims as promoting growth (increased production via higher GDP) and controlling inflation to maintain purchasing power stability.

Why the others are wrong:

• B: Full employment is a goal, but "reduce exports inflation" is nonsensical—exports don't cause inflation directly.
• C: Equal incomes ignore market incentives; governments don't "increase government exports" as a primary aim.
• D: Environmental protection and interest rate cuts are secondary tools, not core economy-wide aims.

Final answer: A