Topic 4- Economic Policies and Management

Question 1

What is Fiscal Policy

Answer 1

Fiscal Policy is the Australian governments use of its annual budget to affect the level of resources use, income distribution and economic activity.

Question 2

When does the budget drop

Answer 2

Second Tuesday of May

Question 3

What are the main instruments

Answer 3

Government Spending and Taxation

Question 4

Define budget outcome and what are the three outcomes

Answer 4

The Net overall budgetary position(T-G)
The outcomes are deficit, surplus and balanced

Question 5

What is a Budget Deficit

Answer 5

When the government spends more than it earns

Question 6

What is a Budget Surplus

Answer 6

When the government earns more than it spends

Question 7

How can economic conditions change the budget outcome

Answer 7

A boom will lead to increased revenue because income for firms and consumers rises leading to a surplus and vice versa

Question 8

Define fiscal policy stance