3.5 - Macroeconomics V1

Government Policies related to Govt. Spending and Taxation, are known as what type of policy?

• Fiscal

• Monetary

• Supply Side

• Deregulation

Expansionary Fiscal Policy is used to achieve the govts goals of ..

• Balanced Current Account, Price Stability

• Price Stability and Reduced Unemployment

• Economic Growth & Reduced Unemployment

• Balanced Current Account and Inflation

How is aggregate demand calculated (inlcude signs and brackets)

If inflation is deemed too high, what type of policy will be deployed?

• Expasionary Fiscal Policy

• Contractionary Monetary Policy

• Loose Monetary Policy

• Contractionary Fiscal Policy

State 3 reasons why the demand for the NZ dollar might increase?

Organize these options into the right categories

Groups:

(a) Increases AD

,

(b) Increases AS

,

(c) Decreases AD

,

(d) Decreases AS

• Decreased interest Rates

• Tax cuts for individuals

• Increased government spending

• Increased exports

• Technological advancements

• Reduced consumer confidence
• Increased import tariffs
• Decreased labor supply
• Increased regulation
• Increased production costs
• Higher interest rates
• Increased consumer confidence

• Increased taxes on individuals
• Increased productivity

• Higher taxes on businesses
• Improved infrastructure
• Increased labor supply
• Decreased government spending
• Supply chain disruptions

• Lower production costs

Draw an AD/AS model to show how decreasing the OCR could lead to decreasing unemployment rates

What is NOT a method for increasing export receipts?

• Free Trade Agreements

• Decreasing Interest Rates

• appreciation of NZD

• Promotion of NZ brands overseas