The policy targets are the specific values which a government attaches to its 
various objectives of macroeconomics policies. 

For instance, the government may have the following policy objectives: 

(1) to achieve full employment at the rate of 3 per cent unemployment; 

(2) to achieve price stability at annual inflation rate of 5 per cent per annum; and

(3) to attain the growth rate of 5 per cent per 
annum for the economy. Thus the policy targets of the government are 3 per cent 
unemployment rate, 5 per cent inflation rate and 5 per cent growth rate per year. 
On the other hand, policy instrument are those exogenous variables that can be 
directly influenced by the government. The government can influence 
macroeconomic policies by such instruments of monetary policies as bank rate, 
changes in reserve ratios, open market operations, selective credit controls, etc. 
similarity; it can use such fiscal policy instruments as tax rates, bud, getary policy, 
compensatory fiscal policy, etc.
Self Assessment Exercise
i. Explain in details the macroeconomic targets.
ii. Differentiate between macroeconomic policy targets and objectives