State and explain the conflicts between Objectives.

*Healthy Growth and low inflation
- when economies grow too quickly demand exceeds supply leading to a rise in prices
- To keep inflation low the government uses tools like high interest rates which can deter economic growth - There is a trend rate of growth in the economy of 2 ½ - 3 % which is believed not to spark inflation

*Healthy Growth & Balance of Payments Equilibrium
- When the economy grows quickly consumption is high and consumers have a tendency to spend their money on imports
- This leads to a larger balance of payments deficit

*Low Unemployment & Low Inflation Phillips curve shows an inverse relationship between unemployment and inflation When the government decreases interest rates or increases public expenditure to decrease unemployment this will push wages higher therefore increasing prices and causing inflation However measures to control inflation e.g. high interest rates and decreases public spending increase unemployment rates

*Healthy growth and the environment – the more rapid the rate of growth the greater the level of production and the increase in levels of pollution

*Healthy growth and equality – when an economy grows it is often the rich that benefit and the poor that suffer creating more inequality in the country

---

Kavungya answered the question on April 30, 2019 at 10:47