A.

Complementary and Conflicting Goals

Enacting policy to achieve one goal may also lead to
the achievement of another goal. For example, the
stimulation of economic growth may also lower the
unemployment rate. When the achievement of one goal
helps to achieve another, these goals are said to be
complementary. Unfortunately, stimulating the
economy to promote economic growth and lower the
unemployment rate may also lead to an increase in
price inflation. Economic growth (or low unemployment)
and low inflation are conflicting goals. This conflict,
one of many tradeoffs, is the reason economics has
been described as the “dismal” science.
Achieving one of the three primary macroeconomic
goals may also conflict with other goals. For example, if
we wish to increase consumption by households (i.e.,
increase the standard of living) we may have to reduce
the level of investment, which would lower long-run
economic growth.