Conflicts caused by Economic Growth

   Conflicts with other economic objectives:

·         Low Inflation: High growth will mean that price level increases and so it is difficult to keep inflation stable. This is because higher growth means resources in the economy are more fully used, and so become scarcer, which causes the price to increase.

·         Balance of Payments: Higher growth leads to higher consumption and so more imports are purchased and so this leads to greater budget deficit. This way this can be combated is if economic growth arises from demand for exports and so it would not lead to budget deficit.