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MACROECONOMICS, NUR ARISSA BINTI MOHAMAD 2019416444 KBA2462A - Coggle…

- - - - Aggregate price level
        
        National income
        
        Employment and unemployment in the economy
  - - - Price of individual goods and services
        
        Wages or income of labour and distribution of income and wealth
        
        Employment by individual business and industries
- - - - To achieve full employment
        
        Full employment refers to the level of employment rate where there is no existence of cyclical or involuntary unemployment.
        
        The potential benefits of full employment in an economy are that available resources can be optimized efficiently.
        
        If more resources are employed, more output can be produced.
      - To achieve price stability
        
        It refers to the efforts of ensuring that the inflation rate in the country is kept as low as possible.
        
        A high degree of inflation rate that is associated with a sustained increase in the general price level can be disastrous to an economy.
        
        Maintaining price stability is necessary to avoid uncertainty and disruptions in the economy.
      - To achieve economic growth
        
        Described as an expansion in national output over a given period of time.
        
        A nation that has achieved economic growth will reflect a positive economic performance.
        
        A business cycle portrays a series of cycles of economic expansion and contraction. There are four phases in a business cycle
        
        Trough
        
        Expansion
        
        Peak
        
        Recession
      - To achieve an equitable distribution of income
        
        The policymakers will formulate a policy of income redistribution to narrow the gap between the higher income and the lower-income groups
        
        Taxes are imposed to reduce the income gap between the higher income group and lower-income group, in order to control inequality.
        
        It is necessary to ensure that the economic growth of a nation is shared equally among the population.
      - To achieve equilibrium in the foreign sector
        
        The foreign sector means economic transactions or activities that take place beyond the political boundaries.
        
        It is important for a country to understand and determine the favourable scale of their balance of payments (BOP).
        
        A country will try to get an overall surplus of the balance of payments (BOP) that indicates greater inflow that outflow of money,
    - - Social justice
        
        Aims to achieve spiritual salvation to human happiness.
        
        Since Islam considers mankind as one family, therefore all members in this family are alike in the eyes of God.
        
        The only criterion of a man's worth is the character, ability and service to humanity.
      - Equitable distribution of income
        
        Income redistribution, voluntary or compulsory is not only an economic necessity but also a means to spiritual salvation.
        
        In Islam, happiness is not derived from the possession of material goods but from contentment and gratitude.
        
        Islam insists on a powerful built-in income redistribution mechanism; nevertheless, some income inequality is allowed since it promotes individual initiative.
      - Universal education
        
        The government must subsidize or provide free education to ensure the education is available to all, regardless of one's financial standing and possession of properties.
        
        Acquisition of knowledge is obligatory in Islam.
        
        Man's claim to superiority over all creations is based on this superior knowledge.
      - Optimal rate of economic growth
        
        Growth in an Islamic economy is comprehensive and includes the moral, spiritual and material apsects of a man's life.
        
        In terms of capital formation, it includes human capital and material capital.
        
        This consideration should influence the composition of investment because the expenditure on education is regarded as an investment
      - Maximization of employment generation
        
        An Islamic economy must ensure that economic growth results in a maximum contribution to the creation of new employment opportunities
        
        Ensuring sufficient employment also includes the need to provide educational and training opportunities in the specific fields.
        
        Additional employment in the long run must be generated in a technically efficient manner with suitable technology, in line with resources endowment.