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Explore the potential conflicts that can arise between different macroeconomic objectives, such as the trade-off between achieving full employment and maintaining stable prices, the tension between economic growth and balance of payments stability, and the conflict between full employment and balance of payments stability.

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Cambridge IGCSE EconomicsGovernment and the macroeconomy

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Explore the potential conflicts that can arise between different macroeconomic objectives, such as the trade-off between achieving full employment and maintaining stable prices, the tension between economic growth and balance of payments stability, and the conflict between full employment and balance of payments stability

This point belongs to The macroeconomic aims of government, especially The macroeconomic aims of government outcomes.
You need to be able to explore the potential conflicts that can arise between different macroeconomic objectives, such as the trade-off between achieving full employment and maintaining stable prices, the tension between economic growth and balance of payments stability, and the conflict between full employment and balance of payments stability.
The key ideas to know are Discuss, Analyse, and Explain.
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DiscussAnalyseExplain

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Paper 2 structured question: The macroeconomic aims of government

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Government Economic Policy

The government has implemented policies to stimulate the economy and reduce unemployment. However, these policies have led to rising inflation rates.

a
Explain the potential conflict between achieving full employment and maintaining stable prices.
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[4]

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Related learning objectives

Understand the main macroeconomic goals of governments, which include promoting economic growth, achieving full employment or low unemployment, maintaining stable prices or low inflation, ensuring balance of payments stability, and redistributing income. Discuss the reasons for selecting these goals and the criteria that governments use to evaluate each one.
The macroeconomic aims of government outcomes

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