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    1 FINAL Economic ResearchEssay StephanieBrito

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    Steohanie Brito
    Fiscal policy plays an important role in the Australian economy. The government uses fiscal policy, including government spending and taxation, to influence the economy and promote strong, sustainable growth. There are two types of fiscal policy - expansionary and contractionary. Expansionary policy boosts demand through increased spending, while contractionary policy lowers demand through decreased spending. In Australia, fiscal policy affects economic stability, employment rates, and inflation. During economic downturns, Australia implements expansionary policy through stimulus measures, and uses contractionary policy like tax increases to control inflation when it rises. Overall, fiscal policy is a key tool the Australian government uses to achieve its economic objectives.

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    1 FINAL Economic ResearchEssay StephanieBrito

    Uploaded by

    Steohanie Brito
    8 views4 pages
    Fiscal policy plays an important role in the Australian economy. The government uses fiscal policy, including government spending and taxation, to influence the economy and promote strong, sustainable growth. There are two types of fiscal policy - expansionary and contractionary. Expansionary policy boosts demand through increased spending, while contractionary policy lowers demand through decreased spending. In Australia, fiscal policy affects economic stability, employment rates, and inflation. During economic downturns, Australia implements expansionary policy through stimulus measures, and uses contractionary policy like tax increases to control inflation when it rises. Overall, fiscal policy is a key tool the Australian government uses to achieve its economic objectives.

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    Fiscal policy plays an important role in the Australian economy. The government uses fiscal policy, including government spending and taxation, to influence the economy and promote strong, sustainable growth. There are two types of fiscal policy - expansionary and contractionary. Expansionary policy boosts demand through increased spending, while contractionary policy lowers demand through decreased spending. In Australia, fiscal policy affects economic stability, employment rates, and inflation. During economic downturns, Australia implements expansionary policy through stimulus measures, and uses contractionary policy like tax increases to control inflation when it rises. Overall, fiscal policy is a key tool the Australian government uses to achieve its economic objectives.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    8 views4 pages

    1 FINAL Economic ResearchEssay StephanieBrito

    Uploaded by

    Steohanie Brito
    Fiscal policy plays an important role in the Australian economy. The government uses fiscal policy, including government spending and taxation, to influence the economy and promote strong, sustainable growth. There are two types of fiscal policy - expansionary and contractionary. Expansionary policy boosts demand through increased spending, while contractionary policy lowers demand through decreased spending. In Australia, fiscal policy affects economic stability, employment rates, and inflation. During economic downturns, Australia implements expansionary policy through stimulus measures, and uses contractionary policy like tax increases to control inflation when it rises. Overall, fiscal policy is a key tool the Australian government uses to achieve its economic objectives.

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    © All Rights Reserved
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    of 4

    NAME: STEPHANIE BRITO

    STUDENT NUMBER: 22056112

    Question: Objectives of the Australian government’s policies are to maintain economic stability, lower
    unemployment, and control inflation. Do you agree that Fiscal policy plays an important role in the
    Australian economy?

    A nation's economic landscape is significantly shaped by fiscal policy, which has an impact on social
    welfare, economic growth, and stability. Horton (n.d.) defines fiscal policy as government spending and
    taxation used to influence the economy. To promote strong, sustainable growth and reduce poverty,
    governments use fiscal policy. With this, there are two types of fiscal policies. One is Expansionary and the
    other is Contractionary. According to Horton (n.d.), Expansionary Fiscal Policy boosts aggregate demand
    through an increase in public expenditure. While Contractionary Fiscal Policy lowers demand through
    decreased expenditure. In Australia, the government controls and implements Fiscal Policy. This affects
    affectivity of the Fiscal Policy on Australia's economy. In Australia’s economic activity in 2020, the
    Expansionary Fiscal Policy supported the economy greatly. Expansionary Fiscal Policy helped boost
    household income and lower unemployment rates. This was implied by lowering interest rates, cutting
    taxes, and increasing government spending. This fulfils Australia's economical goals as it ensures the
    reduction unemployment and ensure price stability, full employment, Australians' economic growth, and the
    welfare of people.

    To elaborate on economic stability, it is defined as a condition of equilibrium in the total economy. It is


    characterised by continuous growth, and the lack of significant swings. While the percentage of the labour
    force that is unemployed is an indicator of the job market state. Inflation is the overall rate of increase in
    prices for goods and services, which reduces money's buying power. Recessions are times when a country's
    economic activity declines. These indicators offer perceptions of an economy's general health and help
    determine policies.

    Australia's economy has had expansionary and contractionary phases over time. These fluctuations, which
    are driven by a number of regional and international factors, have a considerable impact on the status of the
    economy as a whole. For instance, Covid-19 and climate change, since these have an impact on Australia's
    agricultural and mineral resources, which are critical elements in determining economic growth (Adapt
    NSW 2023). In Australia's economy, the government has implemented a number of fiscal policies to help
    sustain growth and reduce the impacts of economic fluctuations. These include tax cuts and stimulus
    packages to encourage investment and spending, as well as social welfare measures to protect the most
    vulnerable members of society. To stimulate the economy, Australia uses an expansionary fiscal policy
    00380 09/16
    during recessionary times, which involves the government increasing spending or cutting taxes in an effort
    to stimulate the economy. As a result, the economy will be able to grow by increasing aggregate demand,
    employment, and investments, which will reduce or even prevent the severity of a recession. Since
    Australia is experiencing inflation at the moment, the government is now aiming to reduce spending and
    increase taxes in order to control inflation. This is known as contractionary fiscal policy and is a key tool
    for managing inflation.

    In conclusion, it is clear that fiscal policy is important to the Australian economy. Fiscal policy affects
    economic development, stability, and resource allocation through the government's authority over taxing,
    spending, and budgeting choices. The government may boost or constrain aggregate demand, promote
    investment, and address income inequality by modifying fiscal policies in response to shifting economic
    conditions.

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    Reference List

    Barone, A 2023, Economic Indicator: Definition and How to Interpret, Investopedia, viewed on 19 May
    2023, https://www.investopedia.com/terms/e/economic_indicator.asp .

    Horton, M n.d., Fiscal Policy: Taking and Giving Away, International Monetary Fund, viewed on 20 May
    2023, https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Fiscal-Policy#:~:text=Fiscal
    %20policy%20is%20the%20use,sustainable%20growth%20and%20reduce%20poverty .

    Reserve Bank Australia, n.d. ,In a Nutshell , ,viewed on 5th of May 2023,
    https://www.rba.gov.au/education/resources/in-a-nutshell/#:~:text=Download%20260%20KB-,The
    %20Reserve%20Bank%20conducts%20monetary%20policy%20to%20achieve%20its%20goals,%2C
    %20on%20average%2C%20over%20time .

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