Aggregate Supply Policies

Question 1

Aggregate supply policies

Answer 1

• are government strategies
• that seek to create more favourable/sustainable supply side conditions for firms that produce G and S
• these measures help reduce Aus production costs,
• increase efficiency
• provide better incentives
• imporve resource access
• and expand productive capacity and sustainable GDP level
• growing the AS line

Question 2

what are some aggregate supply policies?

Answer 2

• immigration policy
• microeconomic reform policy
• supply side aspects of budgetary policy
• environmental policies

Question 3

Microeconomic reforms

Answer 3

are one branch of AS policy involving government cost-cutting, efficiency promoting measures that grow productive capacity

Question 4

Immigration policy

Answer 4

key aspect of AS policy that aim to manage the number and composition of migrants to best support future economic growth

Question 5

Supply-side aspects of budgetary policy

Answer 5

the aspects in the annual budget such as spending on infrastructure projects, lower tax rates and welfare reforms that help to lift efficiency and build a nations productive capacity

Question 6

environmental policies

Answer 6

government measures that seek to alleviate environmental problems and promote sustainable environmental outcomes by altering the decisions made by households and businesses about their economic activities

Question 7

general aims of AS policies

Answer 7

seek to make supply side conditions more favourable for producers of G and S.
And pursue 5 other eco goals and living standards

Question 8

aims of AS policy:

boost eco growth sustainability through increased efficiency

Answer 8

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Question 9

allocative efficiency

Answer 9

about ensuring that resources are used in ways that maximise the satisfaction of societies needs and wants by allocating them through strongly competitive markets

Question 10

Comparative cost advantage

Answer 10

the principle that a nation should specialise in those areas of production in which it has the greatest cost advantage or least cost advantage

Question 11

Productive/technical efficiency

Answer 11

about businesses using least-cost methods to produce G and S most efficiently

Question 12

Dynamic efficiency

Answer 12

involves firms being adaptive and creative in response to changing economic circumstances, in the ways they use resources

Question 13

Intertemporal efficiency

Answer 13

ensuring there is is a suitable balance between resources being allocated towards current consumption on the one hand and, on the other, adequate national saving for financing future investment

Question 14

aims of AS policy:

Promoting low inflation by cutting production costs

Answer 14

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Question 15

aims of AS policy:

promote external stability by increasing our international competitiveness

Answer 15

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Question 16

aims of AS policy:

promoting full employment especially in the long run, through better efficiency

Answer 16

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Question 17

aims of AS policy:

promoting an equitable income distribution through increased efficiency

Answer 17

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Question 18

successful microeconomic reform effects

Answer 18

increased efficiency:

• shifts AS to the right, growing GDP, employment, real incomes and cost inflation.
• Prices fall
• better international competitiveness

Question 19

Trade liberalisation

Answer 19

involves the progressive reduction of tariffs, subsidies and import quotas, and a shift towards the idea of Free Trade where there is an increase in the number of bilateral free trade agreements.

Question 20

Microeconomic reforms

Answer 20

• trade liberalisation
• Labour market reforms
• deregulation of key markets

Question 21

Globalisation

Answer 21

the spread of business and international trade across national boards as if there was only one large market.

Question 22

FTA

Answer 22

Free Trade agreements :

bilateral trade agreements between two or more countries where tariffs, subsidies and quotas and restrictions on the free flow of money capital are removed

Question 23

Budget outlays on Infrastructure to grow aggregate supply

Answer 23

• increases efficiency of resources
• improve international competitiveness
• improve profitability of Aus businesses for growing jobs
• grow productive capacity
• bost eco growth
• improve living standards

Question 24

economic infrastructure

Answer 24

provision of capital equipment, e.g. road, railways, telecommunications and water supply, often y governments, that is mainly used collectively by firms to produce other G and S

Question 25

Social infrastructure

Answer 25

focuses on the provision of collective community services, e.g. education and health

Question 26

features of the immigration policy

Answer 26

made up of: - skilled migrant stream - family migrant stream - humanitarian migrant stream

Question 27

immigration target

Answer 27

represents the desired level of immigration (with sub-categories including skilled, family and humanitarian)

Question 28

skilled migrant stream

Answer 28

1. General skills migration - meet broad skill requirements 2. Employer-sponsored migration - business nominate specific grants to fill skill gaps 3. Distinguishable talent - internationally recognised skills 4. Business innovation and investment program - business owners successful overseas

Question 29

Family migrant

Answer 29

enable family reunification

Question 30

humanitarian migrant

Answer 30

refugees

Question 31

Why are macroeco reform needed?

Answer 31

- allow economy to grow faster and at more sustainable rate - reduce cost inflation pressures - improve the CAD and NFD through increased competition - bring about structural changes, with improved efficiency of resources

Question 32

direct action plan **

Answer 32

the government overarching plan to reduce CO2 emissions by 5% on 2000 levels by the year 2020. Key policy initiatives driving its achievement: - emissions reduction fund - Clean energy (under the management of the clean energy finance corp)

Question 33

emissions reduction fund

Answer 33

aims to reduce Aus's emissions growth alongside other existing programs It will provide incentives for emissions reduction activities

Question 34

emissions reduction target

Answer 34

the government committed to reducing greenhouse gas emissions to 5% bellow 2000 by 2020

Question 35

Renewable energy target

Answer 35

set at 20% by 2020, | aimed at lowering Aus' carbon emissions.

Question 36

trade liberalisation and achieving other goals

Answer 36

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Question 37

policy mix

Answer 37

edot

Question 38

Policy mix

Answer 38

The combination of different categories of policy (budgetary and monetary) to help promote a particular gov eco goal, e.g. Low inflation