Limitations of Macroeconomic Policy (HSC SSCE Economics): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
What does the crowding out effect suggest about expansionary fiscal policy?
What does the crowding out effect suggest about expansionary fiscal policy?
It displaces private sector activity
How does expansionary fiscal policy crowd out private activity in modern Australia?
How does expansionary fiscal policy crowd out private activity in modern Australia?
Inflation rises, RBA raises rates
How can fiscal expansion crowd out exporters through the exchange rate?
How can fiscal expansion crowd out exporters through the exchange rate?
Currency appreciates, reducing competitiveness
What does the twin deficits hypothesis claim?
What does the twin deficits hypothesis claim?
Budget deficits cause current account deficits
What key assumption does the twin deficits hypothesis make?
What key assumption does the twin deficits hypothesis make?
Savings-investment balance stays constant
What happened in Australia in the late 1990s regarding the twin deficits?
What happened in Australia in the late 1990s regarding the twin deficits?
Budget surpluses, but CAD grew larger
What does the quantity theory of money claim about expansionary monetary policy?
What does the quantity theory of money claim about expansionary monetary policy?
It only increases inflation long-term
In the equation of exchange , what does represent?
In the equation of exchange , what does represent?
Velocity of circulation
Why doesn't the quantity theory's assumption about velocity hold in reality?
Why doesn't the quantity theory's assumption about velocity hold in reality?
Behavioural changes affect spending speed
When did Australia abandon monetary targeting as a policy approach?
When did Australia abandon monetary targeting as a policy approach?
1985