Economic Policies to Improve Living Stds

Question 1

Explain the Budgetary Policy and how it effects living stds.

Answer 1

plan of government income and spending. if taxes increase, personal budget is effected.

Question 2

What are the 3 types of budgets G= gvoernment spending, T = taxes coming in

Answer 2

Balanced - G=T
Deficit - G>T
Surplus - G

Question 3

Explain the Monetary Policy and how it effects living std

Answer 3

Reserve Bank of Aus control interest rates (interest rate - how much it costs to borrow money)

If interest rate goes to high people focus on convering interest not spending not G+s . If interest rate is too low inflation occurs but if heightened too much people can’t spend money = unemployment

Question 4

Explain the Productivity Policy and how it effects living stds.

Answer 4

ensuring efficient use of resources

greater Productivty = increased production = competitive advantage with other trading nations = improved standard of living

Question 5

How can productivity be increased

Answer 5

improving labour resources (more g+s produced) OR improvements to capital (tech/machinery)

Question 6

Explain the Training/Work Force Development Policy and how it effects living stds.

Answer 6

goal of making more things

help less skill workers to develop skills for workforce = increased economic growth

Question 7

Explain the MIgration Policy and how it effects living stds.

Answer 7

attracting skilled migrants = increase economic growth = increase living standards

for example doctors

Question 8

Explain the Microeconomic Policy and how it effects living stds.

Answer 8

effects company. market or industry

focuses on promoting competition, efficiency, productivty

Question 9

What are 3 examples of Microeconomic POlicy

Answer 9

trade liberlization ( free trade) deregulations (remove gov regulations) labour market reform (working conditions)

Question 10

What is the reason to improve living standard

Answer 10

higher living standards = prosperous nation = even higher living standards AND
jobs = earn income = afford more G+s = gov get more tax = used for health, education, infrastructure

Question 11

What are the three ways of measuring wealth distribution

Answer 11

1. calculation of net worth ( Assets - Liabilities) 2. The Gini Coefficient (separates economy into 5 quintiles from highest wealthy 20% to lowest) 3. Henderson Poverty line ( If you earn less than $750 a year you are under poverty line)

Question 12

How do governments imporve living standards of population

Answer 12

by ensuring all have adequate income to purchase g+s to meet needs and wants

Question 13

Explain how the government can redistribute income ( steps)

Answer 13

people who work get an income (wages/salary) and also through rent/dividends

people who earn an income pay tax to gov

gov redistributes your wealth through welfare, free educ/health, roads/ streetlights etc

Question 14

what are the 6 ways gov redistributes wealth

Answer 14

welfare, educ/health, tax policies (more you earn more you pay) , superannuation, wage policies, policies promoting growth

Question 15

what are negative externalites and how are they created

Answer 15

gov supports polcies that increase conomic growth/production = more jobs/income
however negs affect third party like the community

eg cigarettes - millions die, increase cost to health care

Question 16

Explain the Gini Coefficient and Lorenz Curve

Answer 16

The Gini Coeficient is a graph that on the x axis ahs the percentage of household and on the y axis has the percentage of income (Going up in 20%). There is a straight line which describes equal distribution where a small percentage of houses makes small amounts of income and large percentages of households makes high percentage of income. What is currently in place is the Lorenz curve where 20% of households make up tiny amounts of income and barely any make up large amounts of income.