the effects of change in the level of economic growth (1 Viewer)

[freaksoutalot]

hey all i have an in class essay with the question being;

"examine the effects of changes in the level of economic growth on employment and price stability. Include a comment on the impact of government policy to promote economic growth in the australian economy."

can anyone be of assistance? im a bit at a loss.
if anyone could list the effects that would be soooo awesome

thanks

 

[Ethanescence]

hey all i have an in class essay with the question being;

"examine the effects of changes in the level of economic growth on employment and price stability. Include a comment on the impact of government policy to promote economic growth in the australian economy."

can anyone be of assistance? im a bit at a loss.
if anyone could list the effects that would be soooo awesome

thanks

Generally you should examine the opportunity costs involved between price stability and full employment. Price stability and employment are both major economic objectives. Since price stability (or low inflation) and full employment (or high employment) are both trade-offs between each other, you have to reference the Phillips curve/graph in relation to this.

For example, if positive economic growth increases the employment rate, it will tend to decrease price stability and have an inflationary effect as consumption demand for g/s increases. If economic growth is negative, there is increased unemployment levels and thus reduced income levels, decreased demand for g/s, therefore leading to decreased levels of inflation.

Also include a comment of government macroeconomic policies (such as fiscal policy/budget) and how these measures could impact upon or promote economic growth. Then link this back to the first part about price stability and full employment to make a summary statement/conclusion making reference to both parts of the question.

Hope this helps.