An objective is what a government wants to achieve. An instrument is the action or tool it uses to try to reach it. Put one question to any phrase: is this the aim, or the means?
This lesson sits in government and the economy. It follows explaining public-sector economic roles neutrally, which gives the vocabulary you use here.
How do I tell them apart?
Try the “in order to” test. The instrument goes before “in order to”, and the objective goes after it. “Pay a subsidy to millers in order to keep bread prices steady.” The subsidy is the instrument, and steady bread prices are the objective.
Reverse the sentence and it reads wrongly: “Keep bread prices steady in order to pay a subsidy” does not make sense.
Worked example: one objective, three tools
Zenia, an invented country, has the objective stable bread prices. Three instruments could be proposed.
| Instrument | What it does | Curve or figure it affects |
|---|---|---|
| Subsidy to flour millers | Lowers the millers’ cost per sack | Supply of bread shifts right |
| Price ceiling on bread | Sets a legal maximum price | Price is limited from above |
| Release of stored flour | Adds to the flour available | Supply of flour shifts right |
All three serve the same objective. Notice that each instrument is a specific action with a name, a subsidy or a ceiling, while the objective describes a result.
Two objectives can also share an instrument. A subsidy might protect millers’ incomes as well as bread prices, and a question that asks about one objective needs only that one.
The mistake to avoid
The common slip is to give a result as an instrument, or a tool as an objective. A question asks: “State one objective of the subsidy.” A student writes “Pay money to millers”, which is the subsidy restated. Compare:
| Question asks for | Wrong answer | Right answer |
|---|---|---|
| Objective | Give money to millers | Keep bread prices stable |
| Instrument | Lower bread prices | Pay a subsidy to millers |
| Objective | Raise taxes | Raise revenue to fund public services |
The last row shows the trap: “raise taxes” is an action, so it is an instrument. The aim behind it, such as funding public services, is the objective.
Quick checklist
- Is it a result the government wants? That is an objective.
- Is it something the government does or changes? That is an instrument.
- Can you put “in order to” between the two and have it still read correctly?
If two answers could be instruments, check whether one names a tool and the other names what the tool changes. The tool is the instrument, and what it changes belongs to the mechanism, covered in tracing a policy mechanism using a stated model.
Check yourself
Sort each phrase as an objective or an instrument.
- Reduce the number of people looking for work but unable to find it.
- Increase government spending on a training scheme.
- Collect a tax on a product that causes harm.
- Protect buyers from sharp price rises.
Answer
-
Objective: it describes a result, lower unemployment.
-
Instrument: spending is an action the government takes.
-
Instrument: a tax is a tool.
-
Objective: it names an aim, protecting buyers, not a specific action.
If you wrote a tool for number 1, look again: a training scheme could be the tool, but the phrase itself only describes the aim.
What to study next
Move on to tracing a policy mechanism using a stated model, then test the set with the government and the economy practice.
If you want a teacher to give you fresh pairs until the test feels automatic, see online one-to-one Economics tuition.