28 - Policy Conflicts

Question 1

4 main conflicts

Answer 1

Unemployment + Inflation
Growth + Inflation
Growth + Inequality
Growth + BoP

Question 2

Fiscal Policy

Answer 2

Lower rate income tax for lower paid jobs
Lower JSA

Question 3

Monetary policy

Answer 3

Reduce base rate interest
Increase money supply (E.g., Quant. easing)

Question 4

Supply side policy

Answer 4

Increasing education + training availability
Reduce red tape for new business

Question 5

What are the 3 main types of policy?

Answer 5

Fiscal policy
Supply side policy
Monetary policy

Question 6

Why do Unemployment + Inflation experience conflict?

Answer 6

Lower unemployment causes higher inflation
Higher unemployment, lower inflation
Due to consumption, investment etc.

Question 7

Why do Growth + Inflation experience conflict?

Answer 7

Overheating economy with excess AD oftem experiences demand pull

Question 8

Why do Growth + Inequality experience conflict?

Answer 8

Benefits of rapid growth are not evenly distributed

Question 9

Why do Growth + BoP experience conflict?

Answer 9

Consumer boom causes trade deficit
Demand + spending on imports rise

Question 10

What is stagflation?

Answer 10

Period of high inflation + slow growth