Fiscal/Monetary Policy Essay Questions? (1 Viewer)

[himynameisho]

The last two half yearly questions involved a choice between fiscal policy and monetary policy,

"Explain the objectives and effectiveness of fiscal [or monetary] policy in Australia."

and

"Explain the effectiveness of fiscal [or monetary] policy in achieving external stability [and/or ecologically sustainable development]"

I have a fair grasp on the two policies, although I'm struggling to understand the macro/micro aims as well as diagrams that can be used. I also don't understand what is a valid evaluation of the effectiveness

So if someone could lead me in the right direction, that'd be great

thanks in advance.

 

[cal-]

which topic is this from?

 

[himynameisho]

economic policies and management i think?

 

[izzah1]

Well macro basically targets your AD while micro targets AS or the productive capacity of the economy. Macro if i remember correctly are your counter cyclical policies i.e. they try and smooth out the fluctuations in the business cycle while micro is used to address structural problems such as low labor productivity, i think. In terms of diagrams you could use the Phillips curve which shows the relationship between inflation and unemployment i.e. lower unemployment = greater inflation (price instability) = conflict on policy etc and also the lorenz curve which shows income inequality. In terms of the evaluation you pretty much have to state how effective fiscal/monetary policy have been in achieving the governments main policies, so for example if we were talking about economic growth you could talk about how a balanced fiscal policy has enabled the government to achieve sustainable growth of greater than 4% which have lead to sustained levels of low unemployment based on Okuns law or something etc or how the RBA's goal of keeping inflation between 2-3% has also enabled sustainable growth and things like that really and form a JUDGEMENT based on that i.e. your personal view on how effective the governments policies have been in achieving their main goals. Its probably a good idea to have a look in your textbook @ either Reilly's or Dixon's books as they are really useful and detailed. Also to actually write these essays you pretty much have to finish the course off so if its just your personal curiosity id probably wait a bit until you've finished policies to actually do the essays.

peace out
izzah

 

[himynameisho]

ahah yeah. too bad my half yearly's in 4 days.

I've got the Dixon textbook and yeah I've found some good information in it, but...

is Evaluation meant to be your own opinion, or is it meant to be information based?

 

[cal-]

evaluate - make a judgement based on the criteria, so draw your own conclusions pretty much... but obviously based on the information