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Why is it so difficult for government to achieve all macro objectives simultaneously?
Specifically showing possible trade-offs i.e.
a) Stimulatory policies which enhance AD might cause inflation
b) Growth might conflict with full employment as structural and technological change affects demand for certain labour groups (see sectoral/technological/regional unemployment), supply-side policies might increase efficiency and create redundancies amongst labour groups
c) Full employment might also create inflation
d) Growth might increase imports (HL: MPM, and lower multiplicative effects) and decrease exports due to inflation
e) Growth Æ inflation Æ depreciation of currency
f) Fiscal stimulus may involve deficit spending and debt, which in turn could have a negative effect on the exchange rat
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Neoclassical economics is dominant approach to economics currently taught and practiced in most of the world (and particularly dominant in Anglo-Saxon countries). It attempts to ex
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what are the uses of elasticity to the private sector
Motives of regional financial institutions: There are mixed motives for the donor countries to provide development assistance to developing nations. While a desire for poverty
What is Deflation? Deflation in economics refers to reduce in the general price level, i.e. the nominal cost of goods and services as well as wages reduce. As, it is an opposi
Should the bank not have anyone to lend the demand deposit to (like that will ever happen) would the size of the money multiplier decrease? If so, why?
Consider a non-renewable resource. There are two periods, now and later. The demand curve in each period (t = 1, 2) is Qt = 10 - Pt. The stock of the resource is 10 units. Extracti
Modern cost curves theory
Assume that in the market there exist two types of workers where the principle cannot distinguish types. The two types only differ with respect to the disutility of effort. The dis
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