Government and the Economy Flashcards Preview

Prelim Economics > Government and the Economy > Flashcards

Flashcards in Government and the Economy Deck (16)
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1
Q

limitations of the free market economy

A

unequal distribution of income/ negative externalities/may lead to monopoly power

2
Q

3 levels of government

A

federal/state/local

3
Q

federal government

A

exclusive powers to make laws affecting the country. responsible for taxes, social security, defence, health education, and culture

4
Q

state government

A

concurrent and residual powers to make laws affecting the state inc. public transport, education, health and housing

5
Q

local government

A

makes laws over local responsibilities, including garbage collection, local roads and streets, regulation and licensing, and sporting facilities

6
Q

exclusive powers

A

only the federal power has exclusive powers and they include the power to make laws over national matters

7
Q

concurrent powers

A

shared by federal and state

8
Q

residual powers

A

exercised by state and also delegated to local governments

9
Q

progressive tax rates

A

the tax rate increases as taxable value increases

10
Q

regressive tax rates

A

the amount of tax you pay as a percentage of your income decreases the more income you earn

11
Q

proportional tax rates

A

the tax rate is fixed for all profit levels

12
Q

fiscal policy

A

can be used to stabilise the economy - budget for surplus or deficit

13
Q

monetary policy

A

set by the RBA through the cash rate

14
Q

federal budget

A

an estimate of commonwealth revenue and expenditure for the forthcoming fiscal year

15
Q

main forms of revenue for the government

A

taxes - individual income tax, company tax, gst

16
Q

main expenses for the federal government

A

social security and welfare, health, education and defence