Topic 4

An increase in the level of goods and services produced in an

economy, which increases the number of material wants satisfied and raises the

living standards of individuals in the economy.

• Economic growth

• Internal Balance

• External Balance

• Economic Development

Economic growth offers substantial benefits to a nation, including:

• an increased standard of living for the population

• improved job prospects for the labour force

• the opportunity for increased public investment in infrastructure and services

  such as education funded through higher government tax revenues

• all of the above

The benefits of achieving full employment includes improved living standards.

• True

• False

In Australia, the Government and the Reserve Bank have made a commitment to

sustaining the average rate of inflation at 2–3 per cent over the course of the business

cycle.

• True

• False

There are ??? key measures of external stability.

• six

• three

• five

• two

High volatility in the

exchange rate usually reflects a lack of external stability.

• True

• False

Government policies also generally aim to

reduce some of the gap between higher and lower income earners through ??

policies.

• distribution

• re-distribution

Ecologically sustainable

development involves

?? and enhancing

the community’s resources

so that ecological

processes and quality of

life are maintained.

• conserving

• preserving

• protecting

• safe guarding

Structural policies are considered micro policies and allow efficiency improvements.

• True

• False

Which statement about the time lags associated with government policies is most correct?

• 1. Fiscal policy has a longer implementation lag than monetary policy

• 1. Microeconomic policies have a shorter impact lag than fiscal policy

• 1. Monetary policy has a longer impact lag than microeconomic policies

• Microeconomic policies have a shorter implementation lag than monetary