A really hard trial question... (2 Viewers)

[SophJI]

i was looking at past trial papers and found a hard one

the question is:

What were the constraints on economic growth before the global financial crisis?



what does this question mean...????
i was guessing fixed exchange rate..but not too sure
can anyone help,,i don't even know how to answer it

 

[bell531]

Is this an essay question? And does it refer to Australia specifically?

Regardless, generally speaking, constraints on growth would be things like high inflation, high unemployment (or better, a high NAIRU), high foreign liabilities/high CAD. There are no doubt others, but I can't think of anymore right now, and assuming the question is more specific than that, you would probably have to refer to particular examples of when/how growth was constrained.

 

[munchiecrunchie]

to add to bell531's post, you'll need to also mention that governments will prioritise their objectives; conflicts in objectives; how stance on govt policy affects eco growth + why that stance is being undertaken.

 

[bell531]

Yeah but in a free market will the government's actions and policies really affect aggregate demand that much?

 

[absorber]

Yeah but in a free market will the government's actions and policies really affect aggregate demand that much?

Look around you at worldwide fiscal intervention and find the answer for yourself

 

[shak99]

Look around you at worldwide fiscal intervention and find the answer for yourself

Yeh, from the above quote, ur right, fiscal policy and intervention from the global view should give you all the answers!

 

[bell531]

Yeah but in a free market will the government's actions and policies really affect aggregate demand that much?

Look around you at worldwide fiscal intervention and find the answer for yourself

Yeh, from the above quote, ur right, fiscal policy and intervention from the global view should give you all the answers!

I really have no idea what I was thinking when I posted that