a) Trade-offs

a) potential conflicts and trade-offs between the macroeconomic objectives

economic growth

  • demand-pull inflation

    • high production costs + high consumption

  • environmental degradation/resource depletion

    • high demand for energy + raw materials + land

  • income inequality

    • firm profit > consumer income

  • budget deficit

    • government expenditure in fiscal policy

  • current account deficit

    • high firm profit + high consumer income → demand for imports