Q.(a) Explain the importance of Sustainable development and its goals.

(a) Sustainable development matters because it balances economic growth with resource conservation and inter-generational equity; its goals are the 17 UN SDGs. (b) The objective factors of consumption are external forces — price level, fiscal policy, windfall gains/losses, interest rate, expectations and wealth.

(a) Importance of Sustainable Development and its goals

Meaning: Sustainable development is development that 'meets the needs of the present generation without compromising the ability of future generations to meet their own needs.'

Importance:

• Conservation of resources: It ensures that natural resources are used carefully so that they remain available for the future.
• Inter-generational equity: It gives future generations a fair share of resources and a healthy environment.
• Protection of the environment: It checks pollution, degradation and over-exploitation, keeping ecological balance.
• Balanced growth: It combines economic growth with social welfare and environmental protection.
• Improved quality of life: It aims at reducing poverty and inequality and raising living standards in a lasting way.

Goals: The United Nations has laid down 17 Sustainable Development Goals (SDGs) to be achieved. They include: no poverty; zero hunger; good health and well-being; quality education; gender equality; clean water and sanitation; affordable and clean energy; decent work and economic growth; industry, innovation and infrastructure; reduced inequalities; sustainable cities and communities; responsible consumption and production; climate action; life below water; life on land; peace, justice and strong institutions; and partnerships for the goals.

(b) Objective factors of the consumption function

Keynes explained that, besides subjective factors, certain objective (external) factors influence the propensity to consume:

• Changes in the general price level: A change in prices alters the real value of income and affects consumption.
• Changes in fiscal (taxation) policy: Higher taxes reduce disposable income and consumption; lower taxes raise them. …