Which of the following is the least convincing explanation for how lower tax rates can assist with the achievement of Full Employment?
Lower tax rates encourage an increase in Consumption, AD, real GDP, demand for labour and employment
Lower tax rates causes some of those not in the labour force to enter the labour force and gain employment as the effective rewards for working are higher
Lower tax rates encourage an increase in the labour supply, placing downward pressure on wages over time and encouraging an increase in the demand for labour and employment
Lower tax rates encourage a larger labour supply, increasing competition in labour markets, raising productivity over time, lowering average costs and prices, and eventually increasing AD, GDP, demand for labour and employment
Which of the following is the least convincing supply side explanation for how a reduction in welfare payments can assist with the achievement of Full Employment?
lower welfare payments increases the incentives to work and causes more people to enter the labour force and gain employment
lower welfare payments encourage an increase in the labour supply, placing downward pressure on wages over time and encouraging an increase in the demand for labour and employment
lower welfare payments encourage a larger labour supply, increasing competition in labour markets, raising productivity over time, lowering average costs and prices, and eventually increasing AD, GDP, demand for labour and employment
lower welfare payments, ceteris paribus, result in a lower government expenditure, enabling the government to lower taxes or raise expenditure in other areas to boost growth and create jobs
Which of the following budgetary policy actions is least likely to be effective in exerting downward pressure on the level of Australia’s Net Foreign Debt (NFD)?
Increased incentive to invest in superannuation
Tax concessions on savings
Delivering a surplus budget
BP supply side measures that helps to increase national productivity levels
Which of the following is not a weakness of budgetary policy when compared to monetary policy
it can be subject to political hurdles
It is subject to a relatively large implementation lag
It takes a significant period of time for monetary policy to have its full effects felt in the economy
It is unable to discriminate and focus on particular markets or industries
An increase in the budget surplus that increases the government's savings or reduce net government debt are not guaranteed to reduce net foreign debt (NFD) because
the private sector is likely to reduce Savings which has overall ambiguous effect on NFD.
the private sector is likely to reduce Savings which should increase Investment and raise NFD.
the private sector is likely to increase Savings which has overall ambiguous effect on NFD.
the private sector is likely to increase Savings which should increase Investment and raise NFD.
Which of the following is the least effective budgetary policy initiative to achieve greater equity in the distribution of personal income in the short to medium term
Lower tax rates
An increase in the tax free threshold
Increased welfare payment
Higher indirect benefits for low income earners (e.g. funding for the provision of low cost housing)
The increase in the luxury car tax should have the following impact on the distribution of income
Improve equality and lower the gini coefficient for social wage income
Improve equality and lower the gini coefficient for final income
Worsen equality and increase the gini coefficient for social wage income
Worsen equality and increase the gini coefficient for final income
Which of the following is not a budgetary policy measure that would be introduced to stimulate economic activity
Lower tax rates
Increase export development grants
Lower interest rates
More spending on infrastructure
Which of the following budgetary policy initiatives is least likely to improve equality in the distribution of income
A reduction in the GST
Child care subsidies
Lower tax rates for lower income earners
An increase in the tax free threshold
Which of the following will not increase the federal government's budget surplus