II. Economic Context
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Conservative government relied on restrictive
monetary and fiscal policies to combat inflation
•
2005 unemployment rate 4.7%
•
Taxation and Government spending
•
Highest percentage of part-time workers in the
course (2004)
•
Conservative government relied on restrictive monetary and fiscal policies to combat inflation.
Ignored goal of full employment and made inflation the primary target of economic policy
Result was to raise unemployment 13.5% late 1985 in country where normal rate in 1960s was below 2%
2005 unemployment rate 4.7%
Lowest in the course and below USA
Taxation and Government spending
2005 ratio of taxes to GDP lowest in course (but way above the USA)
2005 ratio of government spending to GDP above only Canada in the course