Homework answers / question archive / Two and Seven, indicate whether each of these statements is true T, false F, or ‘it depends' #

Two and Seven, indicate whether each of these statements is true T, false F, or ‘it depends' #

Economics

Share With

Two and Seven, indicate whether each of these statements is true T, false F, or ‘it depends' #. E.g. highlight your selection: T F #. Or T F #. Explain why each is true or false, or in what significant circumstances it is true and/or in which significant circumstances it is false. Set One [6 marks] Consider these graphs: Australian Government Budget Balance* Per cent of nominal GDP % State Budget Balances* Per cent of nominal GDP % % % 1.0 1.0 0.01 0.0 0.5 0.5 -2.5 -2.5 0.0 0.0 -5.0 -5.0 -0.51 -0.5 -7.5 -7.5 -1.0 -1.0 - 10.0 20/21 1-1.5 18/19 04/05 11/12 -10.0 85/86 92/93 99/00 06/07 13/14 Underlying cash balance; 2020 July economic and fiscal update Source: Australian Treasury -1.5 83/84 90/91 97/98 Underlying cash balance Source: ABS i) The graphs above show that governments create fluctuations (or cycles) by running fiscal surpluses and then deficits. Indicate TF # Explanation: [Limit 40 words: 2 marks] ii) Fiscal demand-stimulus in Australia today would be greater for a total tax cut of $1b.to low-income earners than a total tax cut of $1b. for high- income earners. Indicate TF # Explanation: [Limit 40 words: 2 marks] iii) In short-run equilibrium, leakages equal injections. So T=G and the budget is balanced. Indicate TF # Explanation: (Limit 40 words: 2 marks]