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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
Instructions to Students 1. Answer all the questions, using economic models where appropriate. Begin a question on a new page. 2. Please attach a copy of the assignment cove
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Economic instruments Financial rewards, incentives and penalties that operate automatically via market forces, to encourage beneficial behavior.
The price of petrol fell during the past year. a. Explain why the law of demand applies to petrol just as it does to all other goods and services. b. Explain how the substitu
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An Exception: OECD Economies It isn't inevitable that there be such divergence. United States--with its 14 to 25-fold increase in output per worker over the years since 1870-ha
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