Policy conflicts
What Policy conflicts means in Economics A-Level, as defined for AQA.
Definitions of Policy conflicts
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Reference: AQA
Possible conflicts between macroeconomic policy objectives, shown by attempts to reduce unemployment below the natural rate using demand-side policies only causing inflation in the long run.
Situations where policymakers frequently face trade-offs, such as between economic growth and inflation, which are difficult to reconcile in the short run using only demand-side policies.
Trade-offs where policies correcting a balance of payments imbalance risk harming other macroeconomic objectives, such as growth, unemployment or inflation.
Arises when a microeconomic tax, such as one on carbon, might conflict with the macroeconomic goal of keeping inflation low.
Topics that use Policy conflicts
- Fiscal policy (AQA A-Level)
- Possible conflicts between macroeconomic policy objectives (AQA A-Level)
- The balance of payments (AQA A-Level)
Related terms
- Macroeconomic objectives
- Aggregate demand and supply
- Aggregate supply
- Automatic stabilisers
- Balance of payments
- Budget balance
- Budget deficit
- Budget surplus
Using Policy conflicts in the exam
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