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Unit 4
1. Explain the impact of historically high wage growth in relation to business productivity and cost-push inflation.
2. Would a reduction in income taxes be considered a macroeconomic or microeconomic policy? Make the case for both.
Unit 2
Explain how a widening gap in income inequality may weaken the effectiveness of expansionary fiscal or monetary policy regarding stimulating
economic growth.
It turns out that evidence is ramping up further that the RBA may lower interest rates at the next meeting. The ABS has just released new labour market data showing that the unemployment rate has risen from 4.1% to 4.3% (seasonally adjusted). The ABC here examines key drivers, including global supply surprises and domestic wage growth, and evaluates the Reserve Bank’s policy responses. Market forecasts, business sentiment, and household impacts are also discussed, so there's a tonne for classrooms to unpack much of the economic cycle, monetary policy and the circular flow of income.
Economic Management
1. Explain how the Australian government might use fiscal policy to respond to a recession. In your answer, discuss the potential benefits
and risks of increasing government spending during economic downturns.
2. Describe how the Reserve Bank of Australia (RBA) uses monetary policy to control inflation. Evaluate why lowering interest rates
might help the economy but could also have some negative effects.
Inequality
1. Explain the difference between income inequality and wealth inequality. Discuss one way the Australian government might try to
reduce these inequalities and why it could be effective or not.
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