Trade-offs Between Macroeconomic Objectives Policy decisions by governments often create a trade-off in the macroeconomic objectives Achieving one objective may come at the cost of worsening progre...
Supply-side Policies Supply-side policies aim to shift the long-run aggregate supply (LRAS) There are two categories of supply-side policies Interventionist and market-based Interventionist supply-...
Demand-side Policies Demand-side policies aim to shift aggregate demand (AD) in an economy There are two categories of demand-side policies Fiscal policy and monetary policy Fiscal policy involves ...
Economic Growth Economic growth is a central macroeconomic aim of most governments Many developed nations (UK included) have an annual target rate of 2-3% This is considered to be sustainable growt...
Benefits & Costs of Economic Growth Economic growth is considered to be the main contributor to an improvement in the standards of living Due to the negative aspects of economic growth, there i...
Trade (Business) Cycle A trade (business) cycle refers to the changes in real GDP that occur in an economy over time This is the actual growth The real GDP will fluctuate above and below the long-t...
Actual Growth & Long-term Growth Actual growth can be differentiated from the idea of long-term trends in growth rates A long-term growth trend is the underlying trend rate of economic growth o...
Causes of Economic Growth Economic growth can occur in the short-run or long-run and each is explained differently Short-run Economic Growth Changes to any of the components of aggregate demand (AD...
The Multiplier The multiplier ratio is the ratio of change in real income to the injection that created the change E.g. If the UK government injected an additional £5m into the economy through gove...
