Conflict and Trade-Offs Between Macroeconomic Objectives
Macroeconomic objectives (growth, low unemployment, price stability, balanced payments) often conflict. Pursuing one may worsen others, forcing trade-offs.
Real World
China's rapid GDP growth averaging 10% annually through the 2000s sucked in vast imports of raw materials, creating persistent trade surpluses with the West but contributing to domestic inflation that exceeded 6% in 2008 and 2011.
Exam Focus
Structure 'discuss' answers around two conflicting objectives, using AD/AS diagrams to show why both cannot be achieved simultaneously.
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