Essay on Macroeconomics Stability

1407 Words6 Pages
I agree to the above statement that macroeconomic stability as well as building long-term growth have been critical in the success of these countries.

What is macroeconomics stability
Macroeconomics stability refers to sustainable economic growth, low and stable inflation, low and stable unemployment and a sustainable balance of payments (BOP) position. These are the four goals that are important for any country to maintain macroeconomic stability. These are measured by key macroeconomic indicators such as GDP growth rate, inflation rate, unemployment rate and balance of payments. It is a “mix of external and internal balance, which in turn implied, in the second case, full employment and stable economic growth, accompanied by low
…show more content…
If we earn more income, we are able to purchase more goods and services. But, for this to happen, more goods and services have to be produced. The circular flow of expenditure and income, which is used to calculate the nation’s economic activity can be used to describe GDP. Households sell labour, land, capital and entrepreneurship to factor markets, which are used for production in firms. Firms then sell goods and services which the households purchased. Firms pay salaries, interests, rents and profits which is the income for households. Firms have goods which are not sold, which are counted as investments. Government spending occurs when they buy goods and services from the firms. Firms sell goods and services to the rest of the world and vice versa. These are the factors which are involved in determining the country’s GDP. (Parkin, 2014:491) From the graph above, we can see that the GDP growth rate of South Korea is generally decreasing, reaching an all-time low of -4.5% in the fourth quarter of 2008. The rate peaked in the third quarter of 2009 at 3.4%. (, 2013) South Korea is number 15 in the GDP ranking table, and number 39 in the GDP per capita table. (, 2013) Exports grew in general as petrochemical products and the wireless telecommunication devices increase. (Korea - Trade: Find the latest economic news and forecasts for Korea, Trade, 2013)
Unemployment rate
“The unemployment rate is the percentage of the
Open Document