ECONOMICS
PRODUCTIVITY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an increase in the cash rate
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an increase in welfare payments in the budget to compensate for higher cost of living
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a reduction in the general level of tariff protection
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income tax cuts for low and middle income earners
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Detailed explanation-1: -To combat inflation, the government could use contractionary fiscal policy. In this case, it might raise taxes and decrease government spending in an attempt reduce the total level of spending.
Detailed explanation-2: -In supply-side fiscal policy, tax cuts, lower interest rates, and deregulation help foster increased production.
Detailed explanation-3: -Supply side policies are government policies which seek to increase the productivity and efficiency of the economy. Supply side policies aim to increase long term competitiveness and productivity, and in the long run supply side policies can help increase the level of employment in an economy as firms expand and grow.
Detailed explanation-4: -Examples of Supply-Side Policies Reducing marginal tax rates. Lower tax rates on interest earned from savings. Higher tax credits on investment. Less government regulation, including the minimum wage.