1. Economic Growth vs. Inflation:

• Conflict: A growing economy may lead to inflationary pressures when aggregate demand (AD) increases faster than aggregate supply (AS).
• Trade-off: Maintaining a balance between economic growth and controlling inflation is a key challenge for policymakers.

2. Economic Growth vs. the Current Account:

• Conflict: Economic growth often results in higher consumer spending and imports. This can lead to a worsening of the current account deficit.
• Trade-off: Some countries achieve export-led growth, such as China and Germany, allowing them to have both high economic growth and a current account surplus.

3. Economic Growth vs. the Government Budget Deficit:

• Conflict: Reducing a budget deficit often requires less government expenditure and higher tax revenue, which can reduce aggregate demand, potentially leading to less economic growth.
• Trade-off: Balancing fiscal discipline and promoting economic growth can be a challenging trade-off for policymakers.

4. Economic Growth vs. the Environment:

• Conflict: High rates of economic growth can lead to increased negative externalities, such as pollution and the depletion of non-renewable resources.
• Trade-off: Policymakers must address environmental concerns while promoting economic growth through sustainable and eco-friendly practices.

5. Unemployment vs. Inflation:

• Short-Run Trade-off: In the short run, there is a trade-off between the level of unemployment and the inflation rate, often illustrated with a Phillips curve.
• Trade-off: Economic policies must strike a balance between reducing unemployment and managing inflation to maintain macroeconomic stability.

1. Environment vs. Competitiveness:

• Conflict: Implementing "green taxes" or regulations to address environmental concerns, such as carbon taxes, can limit the production capacity and competitiveness of domestic firms.
• Trade-off: Policymakers need to balance environmental sustainability with maintaining the competitiveness of domestic industries.