Government & the Economy

Which of the following is an exclusive power of the federal government in Australia?

• Commerce

• Local governance

• Industrial relations

• Defence

State governments spend most of their resources on which of the following needs?

• Essential services

• Local councils

• Foreign affairs

• Sport

Which of the following is a market failure?

• Government allows one producer to serve the entire market through regulation.

• Markets don’t provide for all tastes and preferences.

• Markets fail to provide national defence.

• Taxes misallocate resources.

When is government intervention justified?

• When markets fail

• When governments have an effective and proven policy intervention

• When markets fail to provide all desired goods

• When resources are misallocated and prospects for intervention success are high

Which of the following is not a justification for a tax?

• Taxes allow a government to grow.

• Governments require revenue to fund expenditures.

• Taxes may improve the allocation of resources.

• Imposing a more efficient tax can allow a government to remove a less efficient tax.

What is the main market failure addressed by government expenditure on welfare payments and education?

• Monopoly power

• Environmental degradation

• Redistribution of income

• Economic fluctuations

Which situation is most suited to expansionary fiscal policy?

• Row A

• Row B

• Row C

• Row D

Answer explanation

https://edrolo.com.au/s/2967721/

Monetary policy smooths the business cycle by:

• discouraging borrowing during a recession.

• encouraging borrowing during a boom.

• remaining neutral.

• influencing AD in a countercyclical manner.

Which transfer payment would a 25 year old unemployed person be entitled to?

• JobKeeper

• Austudy

• Youth Allowance

• JobSeeker

Calculate the ART for an individual whose income is $78,000, given the tax rates provided.

• 32.5%

• 20.3%

• 19%

• 18.2%

Answer explanation

https://edrolo.com.au/s/2967723/