Conflicts and Trade-offs Between Govt Objectives

Question 1

What are the potential trade offs as a result of an increase in economic growth

Answer 1

-Demand pull inflation
-Environmental issues
-Balance of payment instability (increased demand for imports)

Question 2

What is the potential trade offs as a result of a decrease in unemployment

(Mention the GRAPH that explains it)

Answer 2

-Increase in inflation

SHORT RUN PHILIPS CURVE