Please enable JavaScript.
Coggle requires JavaScript to display documents.
Macroeconomic Goals, Limitations of policies - Coggle Diagram
Macroeconomic Goals
Economic Growth
High + Sustained EG
- Requires potential output to expand continuously while also making sure that there is an accompanying increase in the economic activity.
Consequences
Effect on Material SOL
-
-
-
NEGATIVE CONSEQUENCE: Widening income gap and structural unemployment - Growth is not always inclusive
-
Versus other goals
Microeconomic
-
Can enjoy larger tax revenue to allow it to direct more spending on public and merit goods to reduce allocative inefficiency and inequity
-
-
Sustainable EG
- Rate of growth which can be achieved without causing other significant economic problems, especially for future generations. A positive and stable growth rate over an extended period of time.
-
Inclusive EG
POLICIES
-
-
-
Direct and indirect subsidies for lower-income individuals
- GST vouchers / Workfare Income Supplement
-
Growth that is sustained over a period of time, BROAD-BASED across economic sectors, and creates productive employment opportunities for the majority of a country's population.
Low inflation
Cost-push inflation
Caused by continuous increase in unit costs of production for reasons not associated with increase in AD
-
-
Demand-pull inflation
When AD persistently exceeds AS where the economy is near or at full employment, causing upwards pressure on prices.
-
-
-
POLICIES
-
-
SS-side policies, tackling inflation in the LR
-
-
-