Conflicts Between Macroeconomic Aims (Cambridge (CIE) O Level Economics)

Increasing economic growth causes the economy to move closer to full employment

Prices for remaining resources are bid up leading to inflation which may outpace the target inflation rate of 2%

Economic growth often increases pollution, negative externalities and the depletion of non-renewable resources

The higher the growth, the faster the depletion

During periods of high economic growth, the profits the owners of the factors of production receive are disproportionate to any increase in workers' wages leading to greater inequality

Economic growth usually leads to higher incomes which leads to an increase in imports by households thereby worsening the current account balance

The closer an economy moves to full employment the less workers will be available for hire and wage inflation will help increase overall inflation

When unemployment is low, incomes are higher and imports increase which worsens the current account balance

Additionally, with low unemployment wages tend to increase which increases costs of production for firms and if they increase their prices, then the level of exports is likely to fall