Which set of goals can,at times,conflict in the short run?
A) High employment and economic growth.
B) Interest rate stability and financial market stability.
C) High employment and price level stability.
D) Exchange rate stability and financial market stability.

Question

Quizplus · Accepted Answer

High employment and price level stability can conflict in the short run due to the Phillips curve trade-off. In the short run, policies that increase employment can lead to higher inflation, while policies that reduce inflation can lead to higher unemployment. Therefore, there is a trade-off between these two goals in the short run. The other goals listed do not necessarily conflict with each other in the short run.

Which Set of Goals Can,at Times,conflict in the Short Run