Potential Conflicts Between Government Aims
Analyse two possible conflicts between government aims.
Public Finance and Government Intervention
Frequently asked question
- Brief explanation of the topic
- Importance of understanding the relationship between economic factors
II. Lower unemployment vs. price stability
- Explanation of how lower unemployment leads to higher incomes
- Increase in total demand and demand-pull inflation
- Less spare capacity and wage demands increase
- Wage-price spiral
III. Economic growth vs. price stability
- Production increases faster than the increase in resources
- Increase in total demand leads to higher prices rather than increased output and employment
IV. Economic growth vs. environmental protection
- Output increases and consumption increases
- Rise in external costs, e.g. pollution, destruction of habitats
- Summary of the main points
- Importance of balancing economic growth, unemployment, price stability, and environmental protection.
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