Government Policies

Fiscal Policy (Choose 2)

• Financial Planning - Budgetary Policy

• Money - Policies relating to the cash rate

• Can take more than a year to implement policy due to budgetary timeframes

• Can take more than a month to see reduction in spending

Monetary Policy (Choose 2)

• Financial Planning - Budgetary Policy

• Money - Policies relating to the cash rate

• Can take more than a year to implement policy due to budgetary timeframes

• Can take more than a month to see reduction in spending

Installing a central bank, setting cash rate targets and floating the exchange rate are examples of

• Monetary Policy

• Fiscal Policy

The RBA has increased cash rate which then leads to an increased interest rate. The effect of this is

• people have to pay less interest on their loans

• people have to pay more interest on their loans

• people have to pay the same amount of interest on their loans.

The benefits of a central bank include (Choose 2)

• • Setting a target rate (range)

• More stability in the economy

• Less stability in the economy

• Setting interest rates

An example of Fiscal Policy Strategy is (Choose 2)

• Progressive Tax Income

  Free Trade Environment

• Progressive Income Tax

  Floating Exchange Rate

• Foreign Investment

  Export Industry Promotion

• Foreign Investment

  Establishing a central bank

Contractionary Measures

• Used in downswing to reduce extremes of trough

• Used in upswing to reduce risk of inflation

• Are used to increase spending in economy

• Are used to decrease spending in economy

Contractionary Measures (Choose 2)

• Used in downswing to reduce extremes of trough

• Used in upswing to reduce risk of inflation

• Are used to increase spending in economy

• Are used to decrease spending in economy

Expansionary Measures (Choose 2)

• Used in downswing to reduce extremes of trough

• Used in upswing to reduce risk of inflation

• Are used to increase spending in economy

• Are used to decrease spending in economy

a. What is human capital?

b. Why is it important to invest in it?