conflicting policy objs Flashcards
what macro objs conflict with each other
unemployment and price stability econ growth and ... price stability fair dist of income and wealth bop
how does full employment and price stability conflict
increase workers leads to higher costs and higher income which both lead to inflation
how does econ growth conflict with price stability
as the economy grows gdp goes up which means income goes up which leads to increase spending which increeases inflation
how does econ growth conflict with fair dist of income and wealth
fast econ growth often results in greater gains for the rich than the poor , some argue there will be a a trickle down affect
how does econ growth conflict with bop
when real incomes rise people tend to buy more imports which doesnt help the balance of imports and exports , however this depends on the income elasticity of demand on all traded goods and services
what does the Philips curve show
shows the trade off between inflation and unemployment
