aggregate supply Flashcards
what is aggregate supply
aggregate supply is the total amount of goods and services (output) supplied by all sectors in an economy over a given period of time (usually a year)
what is microeconomic reform
microeconomic reform is the act of using government policy in order to improve efficiency and the general function of specific sectors in oder to improve overall aggregate supply.
which branch of microeconomic reform are we studying
trade liberalisation
what is trade liberalisation
trade liberalisation is the removal of trade barriers such as tariffs and quotas on imports in order to encourage greater interaction between domestic and international markets and encourage greater competition
What effect does budgetary policy have on aggregate supply
budgetary policy involves using part of the governments budget money to improve infrastructure through the removal of bottlenecks. It can also involve the increased funding of education as a way of making the workforce more equipped to deal with higher productivity
what are bottlenecks
bottlenecks are places in which the flow of goods are forced to pass through areas that take an extended period to pass through or reduce the flow for a certain period of time. Examples include highly unionised ports or insufficient road and rail links
What is immigration policy
immigration policy is the governments policy of controlling the flow of migrants and the composition of the migrant population to best support the growth in the economy
what are the three categories of immigration
1) skilled immigration
2) family immigration
3) humanitarian/refugee immigration
what is skilled immigration
skilled immigration is the addition of people from other countries with desirable skills to the Australian economy to support growth in jobs that there is an insufficient supply of
what is general skills migration
general skills migration is the most common type of skilled migration and involves the government setting a range of categories for potential migrants to fill in order to qualify for migration
what is employer sponsored migration
employer sponsored migration is the addition of migrants to specific businesses funded by the employer themselves as a means of filling skill gaps
what is distinguished talent migration
distinguished talent migration is the migration of people with outstanding talent in skills that has worldwide recognition of being of a high standard
what is business innovation and investment migration
business investment and innovation is the addition of people who have been extremely successful at business overseas and the government desires their skills
What is CHAFTA
CHAFTA is the Chinese and Australia bilateral free trade agreement that increases our exports presence in Chinese markets by removing tariffs and increasing the rate of preferential entry of our exports
what markets are affected by CHAFTA
the agriculture and horticulture market is the market most affected by CHAFTA as almost all (97.9%) of all tariffs will be removed on all AgHort exports.
The energy and resources market is also greatly affected as almost of their tariffs will be removed and preferential entry will be increased
how does higher aggregate supply improve growth
a rise in aggregate supply can arise from increased perceptions of profitability from the business sector. This can cause an increased willingness to produce which flows through to gross domestic product and economic growth. Improved AS can also occur due to higher quality or quantity of resources available to the business sector which can push the production possibility frontier to the right and increase gross domestic product
what is environmental policy
environmental policy is the governments policy of attempting to fight human caused climate change in order to preserve aggregate supply in the future
how does the environment affect aggregate supply
the total amount of farmable land in Australia has a direct affect on the total amount we can supply as an economy. Ensuring the world doesn’t blow up down the track helps the government retain higher aggregate supply in the future
what is the name of the governments current environmental policy
direct action plan
what is the direct action plan
the direct action plan is the plan of the government to sponsor business to perform solution cutting upgrades and initiatives within their company. The government holds a reverse auction where business presents the way they are going to reduce pollution and then if this can be done for a greater reduction per dollar than any other company they will gain the grant to reduce these emissions
what is productive capacity
a country’s productive capacity is the limit to the amount of output they can produce based on the current composition of the supply market and the access to resources
