2.6.4 Conflicts between trade offs and policies Flashcards Preview

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Flashcards in 2.6.4 Conflicts between trade offs and policies Deck (5)
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1
Q

How might the objective of growth conflict with the objective of inflation?

A

high growth = high rise of inflation

2
Q

How might the objective of growth conflict with the objective of a balanced current account?

A

high growth = increased consumption of imports = deficit

3
Q

How might the objective of growth conflict with the objective of a balanced budget?

A

if growth is low, they would stimulate it with a reduction of taxes which means less revenue for government

4
Q

How might the objective of growth conflict with the objective of environmental sustainability?

A

high growth = high pollution

5
Q

How might expansionary fiscal policy affect the interest rate?

A

decrease tax = more people spend = higher interest rates