The Role of Government - summary

The Government uses which macroeconomic policy to reallocate resources and redistribute income via the budget:

• Monetary Policy

• Budget Deficit

• Fiscal Policy

• Budget Surplus

Income tax is the greatest source of government domestic revenue in the 2022-23 budget.

• True

• False

Taxes that cannot be passed on to another individual or organisation are called:

• Progressive Tax

• Goods & Services Tax

• Direct Tax

• Indirect Tax

Government spending includes which of the following examples:

(hint. choose 3 options)

• Welfare & social security

• Company tax

• Education

• Superannuation

• Defence and police services

Examples of Government Revenue include:

(hint. choose 3 options)

• Income Tax

• Goods & Services Tax (GST)

• Transport and Roads

• Fuel Excise Tax

• Recreation and culture

Why do governments intervene in the market? (hint. choose 3 options)

• To increase government spending

• To address a market failure

• To provide a good or service that the whole community benefits from

• To reallocation resources in the economy

• To increase government taxation

Monetary Policy involves the Reserve Bank of Australia adjusting interest rates to stabilise low, long term economic growth. Tight Monetary Policy is used when there is unstable and high economic activity by:

• increasing interest rates, increasing demand causing inflationary pressure.

• increasing interest rates and decreasing demand reducing inflationary pressure.

• decreasing interest rates, increasing demand causing inflationary pressure.

• decreasing interest rates and decreasing demand reducing inflationary pressure.

Australian Income Tax is an example of:

• Progressive Tax

  (% tax increases as income increases)

• Regressive Tax

  (% tax decreases as income increases)

• Proportional Tax (% tax stays the same)

A Government Business Enterprise (GBE) are initially managed by state and federal government and then can be sold off to the market in one of two processes. Those processes are called:

• proprietorship & contractor

• proprietorship & corporatisation

• privatisation & contractor

• privatisation & corporatisation

In the budget, if planned government revenue is greater than (>) planned government expenditure (R > E) the budget is in:

• Budget Balance

• Budget Surplus

• Budget Deficit