Taxation
Budgets
Fiscal Policy
Monetary Policy
Models
100

What are the three ways government receives revenue?

100

What budget stance is expected of the government during a period of strong economic growth.

100

What are the two most important automatic stabiliser systems.

100

The RBA increases the cash rate from 1.85% to 2.10%.

Calculate how many basis points this is.

100

Construct a fully labelled AD/SRAS graph that represents demand-pull inflation.

200

Give three examples of an indirect tax.

200

Explain the two ways in which government can enact an expansionary stance.

Reduce taxation

Increase spending

200

Explain the difference between discretionary and non-discretionary fiscal policy, using examples.

200

Identify three factors that the RBA consider in their monetary policy decision making.

200

Construct a fully labelled model that represents the effects of automatic stabilisers during a contraction.

300

Explain the difference between a direct and indirect tax.

300

Identify three ways in which the government funds a budget deficit.

300

Explain the process of how the taxation system acts as an automatic stabiliser when economic growth is increasing.

Household income rises
Progressive income tax increases
Increased spending generates higher GST revenue and higher corporate tax
Increased taxation reduces some spending power, reducing demand pressure and slowing AD

300

Identify two other monetary policy tools available to the RBA.

300

Construct a fully labelled model that represents the trade off between inflation and unemployment.

400

Define bracket creep.

400

In 2020, the government's budget outcome was a deficit of $50 billion. In 2021, it is expected that revenue will remain the same and that the government will achieve a $20 billion deficit.

What is the budget stance - expansionary, contractionary or neutral?

400

Identify two advantages to fiscal policy.

400

Identify the four channels of monetary policy transmission.

400

Draw a flowchart that explains how a decrease in the cash rate influences the savings and investment channel.

500

Identify a tax that is regressive and explain its impacts on the economy.

500

In 2020, government revenue was $67 billion and expenditure was $41 billion. In 2020, it is expected that the government will increase spending by $6 billion, whilst revenue will decline by $9 billion.

Determine the budget outcomes for each year and the budget stance in 2021.

2020 - Budget outcome: $26 billion surplus

2021 - Budget outcome: $11 billion surplus

2021 - Budget stance: Expansionary

500

Identify three limitations of fiscal policy.

500

The results of a cash rate decision are a reduction in interest payments on debt and an increase in the amount of income available for households and businesses.

Which channel of the transmission mechanism is this cash rate change an example of?

Cash flow channel

500

The economy is currently operating at equilibrium. Construct a fully labelled graph that illustrates the impacts of favourable rainfall to the agricultural industry.

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