Limitations of Economic Policy (HSC SSCE Economics): Flashcards
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Practise the cards
10 cards from this deck
Three key limitations of economic policy
Three key limitations of economic policy
Time lags, political constraints, global influences
Implementation time lags
Implementation time lags
Delays to change/introduce new policies
Impact time lags
Impact time lags
Time for policies to affect economy after implementation
Monetary policy impact lag
Monetary policy impact lag
6-18 months, up to 24 months recently
RBA meetings per year (from 2024)
RBA meetings per year (from 2024)
Eight
Fiscal policy most important when
Fiscal policy most important when
During downturns (quick impact)
Microeconomic reform time lags
Microeconomic reform time lags
Long term: years to implement, up to 20 years for impact
Largest obstacle to economic reform
Largest obstacle to economic reform
Unpopularity (2021 Grattan Institute report)
Purpose of independent agencies (RBA, Fair Work)
Purpose of independent agencies (RBA, Fair Work)
Economically sound decisions without political pressure
Global financial markets' policy effect
Global financial markets' policy effect
Restrict options, narrow choices governments can make