The reduced taxation of labour is one of a number of measures the government could implement to increase the labour force participation rate. Which of the following provides the best explanation for how this initiative actually works to boost the labour supply?
More people enter the labour force in search of higher real wages
More people enter the labour force in search of higher disposable income
More people enter the labour force in search of higher nominal wages
More people enter the labour force in search of higher capital gains
Which of the following best describes the concept referred to as 'crowding out?'
When the government delivers a budget deficit and borrows from financial markets to finance the deficit, causing a rise in interest rates and a reduction in business confidence
When the government delivers a budget deficit and borrows from financial markets to finance the deficit, causing a rise in interest rates and a reduction in capital inflow
When the government delivers a budget deficit and borrows from financial markets to finance the deficit, causing a rise in interest rates and a reduction in Investment
When the government delivers a budget deficit and borrows from the RBA to finance the deficit, causing a rise in interest rates and a reduction in Investment
Which of the following best describes 'crowding out' of the traded goods sector (tradeables sector) following the delivery of a budget deficit?
When interest rates are forced upwards, attracting capital inflow, causing the exchange rate to fall and decreasing growth in AD via a negative effect on net exports
When interest rates are forced upwards, attracting capital outflow causing the exchange rate to rise and decreasing growth in AD via a negative effect on net exports
When interest rates are forced upwards, attracting capital inflow, causing the exchange rate to rise and decreasing growth in AD via a negative effect on exports
When interest rates are forced upwards, attracting capital inflow, causing the exchange rate to rise and decreasing growth in AD via a negative effect on net exports
Which of the following form of financing of a budget deficit is likely to be most expansionary?
borrowing from overseas
borrowing from the public
borrowing from the RBA
borrowing from the public and the RBA
A decrease in tax rates for lower to middle income earners is (ceteris paribus) likely to reduce which of the following:
the participation rate
the gini coefficient on disposable income
the rate of growth in real GDP
productivity
If the government’s fiscal strategy to maintain budget surplus on average, over the economic cycle, it will tend to achieve all of the following except:
A reduction in the credit rating on government bonds
Help to Ensure the current account reflects private saving and investment decisions
Keep public sector debt to low levels
Reduce pressure on interest rates and therefore encourage private investment
Budgetary policy is not overtly used to achieve low inflation because the problem of high inflation is primarily tackled by the RBA. Which of the following budgetary policy measures is least likely to assist the RBA in its efforts to achieve low inflation?
An increase in the size of the surplus relative to the previous year
A generous increase in expenditure on income support for unemployed workers
spending initiatives designed to boost training
higher tax rates or lower government spending
Which of the following fiscal policy supply side measures is least likely to benefit the economy on the supply side?
Education and training expenditure
Child care support
One off tax bonus to taxpayers to stimulate the economy during a downturn
Research and development taxation concessions for businesses
Which of the following is least likely to assist in the achievement of Full Employment?
Personal and business tax cuts
Smaller depreciation allowances (e.g. for investment in R&D)
Export promotion measures such as export development grants
Temporaty assistance to industry following a major climatic event, such as a cyclone or earthquake
Which of the following is least likely to assist in the achievement of Full Employment in the longer term?
A work scheme requiring unemployed persons to undertake training in order to recieve unemployment benefits
Funding for the unemployed to start businesses
Measures designed to enouarage people off welfare dependency