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Form 5 · Ekonomi · iSchool.myChapter 1: TheEconomy andGovernmentMacroeconomicobjectives–Economic growthFull employmentPrice stabilityBalance of paymentsstabilityFair incomedistributionEconomic growth rate–Formula: (Current realGDP − Previous real GDP) ÷ Previous real GDP × 100%–Worked example: RM520bfrom RM500b–Change = RM20b20 ÷ 500 × 100%Answer: 4% growthUnemployment rate–Formula: Unemployed ÷Labour force × 100%–Worked example: 0.6munemployed; labour force 15m–0.6 ÷ 15 × 100%Answer: 4%Inflation rate–Formula: (Current CPI− Previous CPI) ÷ Previous CPI × 100%–Worked example: CPIrises 120 to 126–6 ÷ 120 × 100%Answer: 5% inflationGovernment revenue–Direct taxes: income,company, propertyIndirect taxes:sales/service, excise, customsNon-tax revenueGovernmentexpenditure–Operating expenditureDevelopmentexpenditureFiscal policy–Expansionary: spending↑ / tax ↓ during recessionContractionary:spending ↓ / tax ↑ during inflationMonetary policy–Interest rateStatutory reserverequirementOpen-marketoperationsCredit controlGovernment budgetbalance–Formula: Revenue −Expenditure–Worked example: revenueRM300b; expenditure RM330b–300 − 330 = −RM30bAnswer: budget deficitRM30b