Conflcit Of Objectives

Question 1

Inflation + employment (2++)

Answer 1

Unemployment reduces = increased capacity = increase income = AD increases = increased wages = demand pull inflation
Full capacity = demand high = cost push

Question 2

Economic growth and environmental protection (3)

Answer 2

New factories + increased production = air pollution
EG = increased use of finite resources
Ecosystems destroyed to increase FoPs = trees

Question 3

Economic growth and inflation (2)

Answer 3

Increase demand = increase price = demand pull inflation
Reduced inflation = increased IR to restrict spending = reduced EG

Question 4

Inflation and BoP (2)

Answer 4

Reduced inflation = increased IR = encourages FDI = demand increase for pound = SPICED = deficit

Question 5

Economic growth and wealth inequality (2)

Answer 5

EG = highly skilled workers more in demand
Gov will increase tax to benefit EG

Question 6

Economic growth and BoP

Answer 6

if increase exports (component of AD) get EG but also a surplus

Question 7

Full employment and BoP

Answer 7

Full employment = increased AD = increase imports = deficit