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Economics > Aggregate Supply Policies > Flashcards

Aggregate Supply Policies Flashcards

1
Q

Aggregate supply policies

A
  • 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
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2
Q

what are some aggregate supply policies?

A
  • immigration policy
  • microeconomic reform policy
  • supply side aspects of budgetary policy
  • environmental policies
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3
Q

Microeconomic reforms

A

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

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4
Q

Immigration policy

A

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

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5
Q

Supply-side aspects of budgetary policy

A

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

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6
Q

environmental policies

A

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

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7
Q

general aims of AS policies

A

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

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8
Q

aims of AS policy:

boost eco growth sustainability through increased efficiency

A

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9
Q

allocative efficiency

A

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

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10
Q

Comparative cost advantage

A

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

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11
Q

Productive/technical efficiency

A

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

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12
Q

Dynamic efficiency

A

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

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13
Q

Intertemporal efficiency

A

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

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14
Q

aims of AS policy:

Promoting low inflation by cutting production costs

A

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15
Q

aims of AS policy:

promote external stability by increasing our international competitiveness

A

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16
Q

aims of AS policy:

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

A

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17
Q

aims of AS policy:

promoting an equitable income distribution through increased efficiency

A

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18
Q

successful microeconomic reform effects

A

increased efficiency:

  • shifts AS to the right, growing GDP, employment, real incomes and cost inflation.
  • Prices fall
  • better international competitiveness
19
Q

Trade liberalisation

A

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.

20
Q

Microeconomic reforms

A
  • trade liberalisation
  • Labour market reforms
  • deregulation of key markets
21
Q

Globalisation

A

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

22
Q

FTA

A

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

23
Q

Budget outlays on Infrastructure to grow aggregate supply

A
  • increases efficiency of resources
  • improve international competitiveness
  • improve profitability of Aus businesses for growing jobs
  • grow productive capacity
  • bost eco growth
  • improve living standards
24
Q

economic infrastructure

A

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

25
Q

Social infrastructure

A

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

26
Q

features of the immigration policy

A

made up of:

  • skilled migrant stream
  • family migrant stream
  • humanitarian migrant stream
27
Q

immigration target

A

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

28
Q

skilled migrant stream

A
  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
29
Q

Family migrant

A

enable family reunification

30
Q

humanitarian migrant

A

refugees

31
Q

Why are macroeco reform needed?

A
  • 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
32
Q

direct action plan **

A

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)

33
Q

emissions reduction fund

A

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

34
Q

emissions reduction target

A

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

35
Q

Renewable energy target

A

set at 20% by 2020,

aimed at lowering Aus’ carbon emissions.

36
Q

trade liberalisation and achieving other goals

A

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37
Q

policy mix

A

edot

38
Q

Policy mix

A

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

Economics (5 decks)

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