Economics assessment! (2 Viewers)

[ToO LaZy ^*]

explain the role of economic policies in achieving price stability in australia.


Could anyone point me in the right direction..ie, the main points i should work on, how i should structure it, diagrams, graphs.etc...any helpful websites will also be great

any help would be much appreciated :uhhuh:

 

[grimreaper]

Well the two major policies to talk about are microeconomic reform and monetary policy. Labour market policies in microeconomic reforms have kept wages low preventing cost push inflation, while the reduction in tariff protection has reduced imported inflation. With monetary policy, any time the RBA thinks inflationary pressures are high they nudge up interest rates which has a contractionary effect on the economy and prevents demand pull inflation. You should use a whole heap of stats for something like this I reckon (i.e. recent inflation rates, tariff protection rates before and now, etc). As for graphs, maybe the long run aggregate supply graph where aggregate supply is a straight vertical line and demand is a sloped line, showing how microeconomic reform helps reduce prices and improve efficiency in the long term

 

[ToO LaZy ^*]

do you think i should add a philips curve to show the trade-off between inflation and unemployment?..or is it too irrelevant

EDIT: and i also need a strong introduction, or even just a strong first sentence coz i suck at first liners.
*awaits for i-color...or any other economics genius*

 

[grimreaper]

do you think i should add a philips curve to show the trade-off between inflation and unemployment?..or is it too irrelevant

Since the question is really about Australia, I dont think the Phillips curve is very relevant. In recent years, Australia has lowered unemployment AND kept inflation fairly low.

 

[ToO LaZy ^*]

essay plan update

right, here's my plan

intro
despite teh fact that Australia is currently experiencing its 13th consecutive year of strong eco growth, the inflation rate has remained relatively stable at between 2-3% over the course of the business cycle.

• brief overview of inflation in australia
• briefly on micro, monetary policy, fiscal policy indirectly
• RBA targets
• importance of price stability- present and future

main body of the essay
all with recent figures

• microeconomic reform
  - labour reform (wages-> enterprise bargaining, diappearance of wage indexation)
  - international trade and tariff reform -> trade policy (National Competition Policy)
  - tax reform (reduced company tax, removal of wholesales tax, reduction in income tax, Howard Gov -> A New Tax System (ANTS) in 2000 -> GST)
  - reforms of public trading enterprises (telstra, qantas
• monetary policy- adjustments to the growth rate in the stock of money, manipulation of interest rates, exchange rates, direct and indirect controls on financial institutions
• fiscal policy indirectly- tax cuts, budget surplus, cut back on public spending
• costs and benefits of price stability/instability- distorts resource allocation & income distribution
• how well the gov has achieved price stability
• future outlook

conclusion

• how well the gov has achieved price stability
• future outlook

if anyone can add to the list, it would be great (this will also help you to plan your essay when you're preparing for the hsc)
thanks for the help so far :uhhuh:

 

[i-color]

this is an example of a good intro:

despite teh fact that Australia is currently experiencing its 13th consecutive year of strong eco growth, the inflation rate has remained relatively stable at between 2-3% over the course of the business cycle.

Then go on and define what inflation is, and how it is measured etc etc. Also, it is good to talk about effects of price instability eg distrots resource allocation & income distribution etc etc....and hence why govt wants to maintain price stability through various policies.

Then you go into the policies etc etc. MAIN policy is monetary policy....it is the most effective in past years in targeting low inflation.....then micro reform and then fiscal policy indirectly

 

[ToO LaZy ^*]

ah...you've come to the rescue i-color!
thanks for the intro...
*adds to the list*

EDIT: btw..could you explain how fiscal policy indirectly affects price stability?
is it because when the government for example...introduce tax cuts, people would have more income to spend and therefore increase savings and investment leading to a higher aggregate demand hence create inflationary pressures?

 

[i-color]

yeh that's right. the govt doesn't really target inflation, but through the expansionary or contractionary stance of the budger the govt can affect demand pull inflation etc.

 

[ToO LaZy ^*]

ahh..gottcha

 

[nesstar]

I agree that u should chuck in a philip's curve, cos in our last assessment heaps of people lost marks for not talking about the specific economic theories even though they didn't seem related to the question...

 

[Zarathustra]

The Phillips curve is wrong - have you seen the actual graph of infl. vs. unempl. - it just looks like random lines.

 

[ToO LaZy ^*]

yeah i might as well add it in...i've got 1500 words to play around with.

 

[ToO LaZy ^*]

yeah, sure will.
approx how many typed pages is 1500 words? (times new roman)

 

[Persephone87]

yeah, sure will.
approx how many typed pages is 1500 words? (times new roman)

approx. 3 pages on a font size of 12.


edit: your avatar! It can be taken in so many ways!

 

[ToO LaZy ^*]

approx. 3 pages on a font size of 12.


edit: your avatar! It can be taken in so many ways!

3 pages..sweeet..that should take about 2 nights..

hehe, yeah, my av rox my sox!

 

[ToO LaZy ^*]

As for graphs, maybe the long run aggregate supply graph where aggregate supply is a straight vertical line and demand is a sloped line, showing how microeconomic reform helps reduce prices and improve efficiency in the long term

hey, i'm having trouble finding this graph..?
what does it actually look like? (could you do a rough sketch in paint )
any links/websites to the graph would be great

cheers!

 

[Persephone87]

hey, i'm having trouble finding this graph..?
what does it actually look like? (could you do a rough sketch in paint )
any links/websites to the graph would be great

cheers!

there you go.

 

[ToO LaZy ^*]

ohh...sweet as!..
....and now could you explain it..haha..no really...

what is RDO?

 

[Rorix]

real domestic output i guess
I prefer real GDP

 

[ToO LaZy ^*]

oh..right.
and what do these graphs actually tell us?