2025 T2 2nd Economics exam Flashcards
(25 cards)
What does microeconomics study?
Small units in the economy like individuals, businesses, industries, or specific markets.
What is the purpose of microeconomic policy?
To improve productivity, competitiveness, consumer outcomes, and living standards.
What is trade liberalisation?
The removal of tariffs, quotas, and subsidies to open markets to global competition.
Why is immigration policy important in microeconomic reform?
It helps fill labour shortages by attracting skilled migrants.
What role does environmental policy play in microeconomics?
It encourages sustainable economic activity.
What are labour market reforms?
A shift from centralised wage fixing to enterprise bargaining to increase flexibility.
What is market deregulation?
Reducing government rules to make markets more efficient and competitive.
What is the National Reform Agenda?
A focus on stopping anti-competitive practices like price fixing and collusive bidding, monitored by the ACCC.
What is fiscal policy?
Government use of spending and taxation via the national budget to influence the economy.
What are the three budget outcomes?
Surplus, Deficit, Balanced.
Name three sources of government revenue.
Direct tax, Indirect tax, Non-tax revenue.
Who manages monetary policy?
The Reserve Bank of Australia (RBA).
What are the main tools of monetary policy?
Interest rates, cash rate adjustments, and money supply control.
What is the goal of monetary policy?
To control inflation and manage demand.
What are macro policy tools used for?
Demand-side and supply-side economic interventions.
What’s an example of fiscal policy?
Government spending on infrastructure.
What’s an example of monetary policy?
RBA raising interest rates to reduce inflation.
Why does the government intervene in markets?
To stabilise the economy, reallocate resources, and distribute income fairly.
How does the government stabilise the economy?
By addressing inflation or unemployment through policies.
What is meant by “reallocation of resources”?
Correcting market failures by redirecting resources to where they’re most needed.
How can the government help with income distribution?
Through welfare payments, progressive taxation, and other social policies.
Who controls fiscal policy vs monetary policy?
Fiscal: Government; Monetary: Reserve Bank of Australia (RBA).
What are the main tools of fiscal and monetary policy?
Fiscal: Taxes and government spending; Monetary: Interest rates and money supply.
What is the goal of fiscal policy?
Budget control and providing services.
