Tag: balance of payments
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Inflation and Economic growth
Inflation and economic growth In order to control inflation the government has to reduce the demand by taxing Economic growth results in increasing prices because people are willing to spend more as they have confidence and money Decreasing the inflation rate will result in reduction in economic growth
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Unemployment and Inflation
Unemployment and inflation In order to control inflation rates the government may increase interest rates or put taxes on the businesses By controlling inflation unemployment increases. This is how it happens: Lower profits as costs rise Decrease in investment Businesses don’t start or businesses shut down People lose their jobs or don’t get jobs
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Aims of government policies
Aims of government policies Full employment Price stability Economic growth Redistribution of income Balance of payments stability