Use policy-trade-off questions to connect lower unemployment, environmental restrictions and inflation with gains and costs for the economy.
What is likely to happen if a government successfully reduces unemployment?
Inflation might rise as more people have money to spend
More people working leads to lower overall economic growth
Inflation decreases because people have less money to spend
Government spending on benefits would increase
A
In China there are restrictions on coal consumption and emissions from factories. These restrictions have led to job losses in some industries.
Explain one reason why there might be a trade-off between economic growth and environmental protection for an economy such as China.
AO2 3 marks
Award 1 mark for identifying a relevant reason
Award 1 mark for developing the reason
Award 1 mark for the response being in context
- One reason is that environmental protection can increase the cost of doing business (1). Firms may need to invest in new equipment/technologies to reduce emissions (1) which may result in slower economic growth (1)
- One reason is that more environmental protection such as restrictions may limit business activity (1) to reduce emissions/pollution from factories (1), which could lead to lower economic growth (1)
Accept any other appropriate response
(3)
State one possible trade-off with inflation.
AO1 1 mark
Award 1 mark for one possible trade-off
- Higher unemployment
- Lower economic growth
- Worsening current account on the balance of payments
Accept any other appropriate response
(1)