The Economic Policy Mix (HSC SSCE Economics): Flashcards
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Practise the cards
10 cards from this deck
Two main categories of economic policies
Two main categories of economic policies
Macroeconomic policies and microeconomic policies
Fiscal policy
Fiscal policy
Govt decisions about taxation and government spending
Monetary policy
Monetary policy
Changes to interest rates set by the Reserve Bank of Australia
Economic policy mix
Economic policy mix
Combination of macro & micro policies to achieve objectives
What macroeconomic policies primarily influence
What macroeconomic policies primarily influence
Aggregate demand
What microeconomic policies primarily influence
What microeconomic policies primarily influence
Aggregate supply
Counter-cyclical policies
Counter-cyclical policies
Policies that work against the direction of the business cycle
Three contractionary policy tools
Three contractionary policy tools
Higher taxes, reduced govt spending, higher interest rates
Three expansionary policy tools
Three expansionary policy tools
Increased govt spending, tax cuts, lower interest rates
Supply-side economics
Supply-side economics
Focus on policies that increase aggregate supply not demand