Original post by Bruce267099Economic growth and environment
This will result in more production and so employment will rise. This will lead to higher incomes and so consumption will increase and so there will be more litter.However as there is economic growth firms will be able to invest in environmentally friendly methods of which will better the environment.
Economic growth and the balance of payments
This will result in higher income and increased consumption, so there will be more imports, which will worsen the current account.However economic growth will also cause investment which will increase productive efficiency, leading to an increase I'm quality and more exports, improving the current account.
Full employment and environment
This will lead to more people working and so production will increase and so litter will increase as well as travel, causing pollution.However this employment will result in more taxes, of which could be spent on the environment.
Economic growth and income distribution
This will lead to higher incomes, as people in higher positions tend to be paid more in wage increases so there will be unequal distribution.However they will have to pay more tax, which will go back to the unemployed in the form of benefits.
Low inflation and the balance of payments
When achieving low inflation interest rates will increase. This will attract hot money and so it will cause an appreciation in the exchange rate, reducing exports and increasing exports, worsening the current account.However these both work well together, as low inflation tends to lead to stable prices, leading to increase competitiveness, improving the current account.
Full employment and low inflation
This will lead to full employment and increased spending causing demand pull inflation. It will also increase employment, leading to increased wages and cost push inflation. Furthermore it will lead to high interest rates, reducing spending and investment and increasing unemployment.However during a recession there was high inflation and high unemployment whereas now we have low inflation and low unemployment.
Conflictions of Macroeconomic policiesReflationary
Fiscal policy and Monetary policy
Aggregate demand will shift to the right. This was decrease inflationary pressures and so the monetary committee will have to increase interest rates to counterbalance the effect of the fiscal policy.
Supply Side Policy and Reflationary Fiscal Policy
By using the SSP to try and make the workforce more productive education might be improved. This will require high levels of government spending having an impact on the fiscal policy. Added to that if the time spent in education is increasing to improve human capital the government won't receive tax revenue, again affecting the fiscal policy.
Monetary Policy and Supply Side Policy
If interest rates rise this will make borrowing more expensive. It will also mean there is more to pay back on existing borrowing. Firms who have borrowing will now find their costs have increased and will not be able to produce as much shifting aggregate supply to the left having an impact on the supply side policy.