Economics
Chapter 1 Class 6 Economics - Introduction to Economics

ECONOMIC GOALS OF SOCIETY - Teachoo.png

The economic goals of a society are the desired outcomes that reflect the values and preferences of its members. Some of the common economic goals are:

  • Efficiency : using resources in the best possible way to produce the most output with the least waste
    • For example, an efficient economy produces more goods and services with fewer inputs or uses fewer resources to produce a given level of output. This means that there is less wastage or loss of resources in production.

    • Efficiency can be measured by concepts such as productivity, which is the ratio of output to input; or allocative efficiency, which is achieved when resources are used to produce goods and services that are most valued by society.
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  • Equity : distributing resources and outcomes fairly among different groups and individuals
    • For example, an equitable economy ensures that everyone has access to basic needs such as food, health, education, etc. and that no one is discriminated against or exploited on the basis of their gender, race, religion, etc.

    • Equity can be measured by concepts such as income distribution, which shows how income is shared among different segments of society; or social justice, which reflects how rights, opportunities, responsibilities, etc. are respected and protected for all members of society.
  • Growth: Increasing the quantity and quality of goods and services available over time.
    • For example, a growing economy produces more goods and services each year than it did in the previous year. This means that there is an increase in output or income per person over time.

    • Growth can be measured by concepts such as gross domestic product (GDP), which is the total value of all goods and services produced in a country in a given period; or economic development, which reflects not only output but also other aspects of well-being such as health, education, environment, Etc.
  • Stability: maintaining a steady level of prices, output, employment and income
    • For example: a stable economy avoids large fluctuations in prices, output, employment and income that can cause uncertainty, hardship and instability for individuals and businesses. This means that there is a balance between aggregate demand and aggregate supply in the economy.

    • Stability can be measured by concepts such as inflation, which is the rate of change in the general level of prices; or business cycle, which shows the phases of expansion and contraction in economic activity.
  • Sustainability: using resources in a way that does not compromise the ability of future generations to meet their needs
    • For example, a sustainable economy preserves and enhances the natural environment and the quality of life for present and future generations. This means that there is a balance between economic growth and environmental protection.

    • Sustainability can be measured by concepts such as ecological footprint, which shows how much land and water are needed to support a given level of consumption; or green economy, which promotes low-carbon, resource-efficient and socially inclusive development.
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Davneet Singh

Davneet Singh has done his B.Tech from Indian Institute of Technology, Kanpur. He has been teaching from the past 14 years. He provides courses for Maths, Science, Social Science, Physics, Chemistry, Computer Science at Teachoo.