6.4 Conflicts and Trade-offs between objectives and policies

Question 1

Potential Conflicts?

Answer 1

1) Inflation vs Unemployment (Phillips Curve)
2) Growth vs Inflation
3) Growth vs BoP
4) Growth vs Inequality

Question 2

Measures to overcome potential trade-off between growth and BoP?

Answer 2

• Depreciation
• Improve labour productivity
• Increase export investment