Tradeoffs

The sacrifice of some or all of one economic goal, good, or service to achieve some other goal, good, or service.

• Implement and evaluate the policy that was selected. After implementing the policy, we need to evaluate how well it worked. Only through unbiased evaluation can we improve on economic policy. Did a specific change in taxes or the money supply alter the level of employment to the extent predicted? Did deregulation of a particular industry (for example, banking) yield the predicted beneficial results? If not, why not? What were the harmful side effects, if any? How might the policy be altered to make it work better? (Key Question 5)

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