MONEY, MONEY, MONEY
A temporary contraction of the economy in which there is no economic growth for two consecutive quarters.
Recession
The current cash rate target is
4.1 per cent
This type of unemployment occurs with changes in economic activity over the business cycle.
Cyclical unemployment
A statement of the government's estimated revenue and expenditure for the coming financial year
Budget
What are the Australia's Economic objectives?
Sustainable economic growth
Full employment
Price stability
External stability
Sustainable economic development
Equitable distribution of income and wealth / improved standard of living
The relaxation or removal of government restrictions on the free operation of markets.
Deregulation
Rate increases as the wealth or income of the tax payer increases.
Progressive tax
The impact of a contractionary monetary policy on the money supply graph
SHIFT MONEY SUPPLY TO THE LEFT
This type of unemployment occurs when there is a mismatch between jobs that are available and the people looking for work.
Structural unemployment
Those elements of non-discretionary fiscal policy that operate without the need for government action.
Automatic stabilisers
A sustained increase in the productive capacity of an economy over a specific period of time, generally indicated by the increased availability of goods and services in the economy
Economic growth
THE MAIN PROBLEM OF SSP IS
A. IT IS LAGGING POLICY
B. ITS EXPENSIVE AND INCREASES DEBT
C. ITS IMPLEMENTATION LAG IS LONG
D. ITS A BLUNT POLICY INSTRUMENT
C. ITS IMPLEMENTATION LAG IS LONG
Percentage of income paid in taxes decreases as income increases
Regressive tax
The current monetary stance is
contractionary
This type of unemployment occurs when people move between jobs in the labour market and when they transition into and out of the labour force.
Frictional unemployment
Deliberate changes to fiscal policy instruments to influence the level of aggregate demand. Also referred to as 'structural components of the budget'.
Discretionary fiscal policy
The measure of economic growth
GDP growth
JOB KEEPER WAS BASICALLY
A. TAX CUTS
B. QUANTITATIVE EASING (QE)
C. A SUBSIDY TO EMPLOYERS
D. FREE MONEY FOR WORKERS
C. A SUBSIDY TO EMPLOYERS
How much is the inflation in Australia at the moment?
6.0% (June 2023)
THE INFLATION TARGET IS
2-3% CPI
This type of unemployment occur when people are not counted as unemployed in the formal ABS labour market statistics, but would probably work if they had a chance.
Hidden unemployment
A negative budget balance; when receipts fall short of expenditures
Budget deficit
A policy in which a country does not permit other countries to sell goods and services within its borders or imposes restrictions for them to do so.
Protectionism
THe total or partial sale of a government business enterprise
Privatisation
This is the lowest unemployment rate that can be sustained without causing wages growth and inflation to rise. It is a concept that helps us gauge how much ‘spare capacity’ there is in the economy.
NAIRU
The disadvantages of monetary policy are
- slow/lagging
- a blunt instrument
How do you calculate the participation rate?
Participation rate is the percentage of people in the working-age population that are in the labour force.
Participation rate = Labour force / working-age population x 100
(remember that only those who are willing and able to work are in the labour force)
Elements of fiscal policy that are caused by changes in the level of economic activity that impact the level of national income.
Cyclical components of fiscal policy
The 'crane index' in a region is a leading, lagging or coincident indicator?
Leading
ARGUABLY THE MOST EFFECTIVE LONG TERM SSP IN SOLVING LOW PRODUCTIVITY AND POVERTY IS
A. UNION REFORM
B. TAX REFORM
C. FREE TRADE
D. EDUCATION
D. EDUCATION