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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
Problem 1: (a) Differentiate between positive and negative externalities? Justify your answer using examples. (b) To what extent do government policies influence externali
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an emission fee levied against polluting firms will tend to shift the supply/demand curve of the firm/product to the left/right?
The objective of the Government of Mauritius, as announced in the Budget Speech 2007/2008, is to target 2 million tourists by 2015. (a) Critically assess whether the target of
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How does the approach of someone who has adopted the precautionary principle differ from someone with a blind faith in substitutability, when it comes to a non-renewable resource l
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