economic objectives and conflicting objectives

what are 6 macroeconomic objectives

inflation rate

unemployment

equality and equity

enviroment

economic growth

budget deficit

what are three conflicting objectives

inflation and unemployment

economic growth and inflation

economic growth and current account

inflation and unemployment. why, one eval

1. phillips curve illistrates that as an economy has low inflation,there is likely to be high unemployment because if unemployment is low, more people have higher disposable income whcih increases consumtion which increases AD (C 60%)

2. 2010 stagflation- both inflation and unemployment rose 2008 crash

inflation and economic growth why, one eval

if economic groth if acheived through AD, and there is no spare productive capacity then PL rises.

however if there is spare capacity, economic growth can occour w out inflation

economic growth and current account why and two evals

supply fixed in short run so cant keep up with inc in AD as econ growth occours. this causes imports to rise as there is excess demand

however, it depends on type of economic growth. if slow, AS might be able to respond depending on the elasticity

depends on the MPS of indeviduals

what is stagflation and how does it evaluate one of the conflicting objectives

Stagflation refers to a period where both inflation and unemployment rise simultaneously, breaking the expected inverse relationship described by the Phillips Curve.

It is usually caused by supply-side shocks, such as a sharp rise in oil prices, which increase firms' production costs. This leads to higher prices (inflation) while also forcing firms to cut back on employment due to higher costs, pushing up unemployment.

As a result, policymakers may find it extremely difficult to reduce either unemployment or inflation without worsening the other, highlighting the complexity of managing macroeconomic objectives during supply-side crises."