Fiscal Policy
What is the term for a budget where government spending is greater than revenue?
Deficit budget
What is the name of Australia's central bank?
The RBA
An applicant has no English skills, no job offer in Australia, and is 55 years old. Likely accepted or rejected?
Likely rejected
What do we call the tax system where people with higher incomes pay a higher tax rate?
Progressive taxation
Which countries are hosting this year's World Cup(FIFA)?
Canada, Mexico, and the United States
House prices are booming, everyone is spending freely, and inflation is climbing fast. Should the government run a deficit or surplus budget?
Surplus budget
A café owner notices customers are spending more freely and prices are slowly creeping up. Is this a sign that interest rates should rise or fall?
Rise:demand/spending is too strong, risking inflation
An applicant is 28, fluent in English, a qualified nurse, with no health or security issues. Likely accepted or rejected?
Likely accepted
A single parent with no job and two young children applies for government support. Which type of redistribution policy is most relevant here?
Welfare payments
The government decides to run a balanced budget this year. Trace the chain of effects, step by step — does this stimulate or contract the economy, and why?
Neither — spending = revenue, so it doesn't add or remove money from the economy; it's a "neutral" stance
If the RBA keeps interest rates unchanged, what does this suggest about the current state of the Australian economy?
The economy is fairly stable, with no major inflation or unemployment problems, so there's no need to use interest rates to stimulate or restrain it.
Explain how a high number of skilled migrants can help raise Australia's living standards.
Fills skill shortages, boosts production/spending/tax revenue, raises growth
Why does the government make superannuation contributions compulsory, instead of letting workers choose whether to save for retirement themselves?
If it were voluntary, many people might not save enough for retirement and would rely more heavily on the Age Pension later in life, making it compulsory ensures everyone builds some retirement savings.
A government runs a deficit budget for 4 years to fight a recession, and the recession ends, but the government debt has now doubled. Suggest two different paths the government could take next, and one trade-off for each.
E.g. (1) Run a surplus to pay down debt — trade-off: may slow growth/cut services;(2) Stay balanced and grow out of debt slowly — trade-off: debt stays high for longer
Inflation is high, and unemployment is also high. Explain why this makes it hard for the RBA to fix both problems with one interest rate decision.
Raising rates would fight inflation but make unemployment worse; lowering rates would help jobs but push inflation higher. The RBA can't do both with one tool.
Although Australia accepts large numbers of skilled migrants each year, some remote towns still can't find enough doctors and nurses. Suggest two possible reasons why skilled migrants may be reluctant to settle in remote areas.
E.g. (1) Remote areas may have fewer schools, services, and job opportunities for a partner; (2) Migrants may prefer cities where there are already communities/support networks from their home country.
Two countries both raised the minimum wage by 10%. In Country A, unemployment stays the same; in Country B, unemployment rises. Suggest two possible reasons for this difference.
E.g. Country B's businesses had thinner profit margins and cut jobs / Country A's economy was growing strongly enough to absorb the cost.
What is Miss Zhang's sign? (Hint: Air signs)
Libra
A government should never run a deficit budget." Do you agree or disagree? Justify your answer using one situation where a deficit helps and one risk of running one.
Disagree (or partial) — helps during recession by stimulating jobs/spending; risk is rising debt if overused long-term
"Lower interest rates always help the economy." Do you agree or disagree? Justify using one benefit and one drawback of low interest rates.
Disagree
Benefit: stimulates spending/employment; Drawback: can fuel future inflation or asset bubbles if kept too low for too long.
"Australia should accept migrants purely based on need (e.g. refugees), not on skills." Do you agree or disagree? Justify using one benefit and one drawback of a skills-based system.
Disagree
Benefit: fills workforce gaps and boosts growth; Drawback: may overlook humanitarian need.
“Progressive taxation is the fairest way to redistribute income.” Do you agree or disagree? Justify using one strength and one weakness.
Disagree
Strength: reduces inequality, funds services; Weakness: may discourage high earners from working/investing more.
How do you write Miss Zhang's last name?
赵 钱 张 孙 李 周 吴
张
（Bonus 700 marks if you can write it on the board）