Figure 2
Aiming for a steady rate of economic growth is an important economic objective of the UK government. The average rate of economic growth has gradually fallen in the UK. In the 1980s, the average economic growth was 2.7% per year. In the 1990s, average economic growth fell to 2.3% per year. Since 2000, UK average economic growth up until the pandemic of 2020-2021 was 1.8%.

The figure shows a bar chart titled 'UK economic growth, 2000-2019'. The y-axis shows '% change in real GDP per year' from -5 to 4. The x-axis shows the years from 2000 to 2019. Most years show positive growth between 1% and 3%. There is a significant dip in 2009, showing negative growth of around -4%.

Governments aim for economic growth because it generates benefits for both the government and the rest of the population. Clearly, economic growth means more is being produced in an economy, which normally means that incomes will be rising - though this may not be shared out evenly. However, there are some problems created by economic growth. If economic growth is too high, then trade-offs with other objectives are more likely to occur.

Using Figure 2, assess whether the government is right to always aim for economic growth as an objective for the economy.

The government is largely right to aim for economic growth as a primary objective, but it should not be pursued at all costs, as there are significant trade-offs. On one hand, economic growth is essential. As the text states, it 'generates benefits for both the government and the rest of the population'. For example, growth leads to higher employment as firms need more workers to increase production. This, in turn, leads to higher average incomes and improved living standards. Furthermore, a growing economy boosts government finances through increased tax revenues from incomes, profits, and spending, which can be used to fund public services like the NHS and education. The chart in Figure 2 shows that for most of the 2000-2019 period, the UK experienced positive growth, which supported these benefits. The sharp negative growth in 2009 highlights the severe consequences of a lack of growth (a recession), which included mass unemployment and a squeeze on public finances. However, 'always' aiming for economic growth can be problematic due to the trade-offs mentioned in the text. Firstly, rapid economic growth can lead to demand-pull inflation if aggregate demand outstrips supply. This erodes the real value of incomes and can lead to a boom-and-bust cycle. Secondly, growth can have negative environmental consequences, such as pollution and resource depletion, which are negative externalities not reflected in GDP figures. Thirdly, the text notes that the benefits of growth 'may not be shared out evenly', leading to increased income inequality. A focus solely on the headline GDP figure can mask growing disparities between the rich and poor. In conclusion, while economic growth is a crucial objective for improving prosperity and funding public services, the government should aim for sustainable and inclusive growth. It is not right to 'always' aim for maximum growth without considering the potential costs of inflation, environmental damage, and inequality. A balanced approach that considers these trade-offs is more appropriate.