Key Economic Challenges facing Australia in 2016

Key Economic Challenges facing Australia in 2016

The Australian economy has been one of the best performing economies since the Global Financial Crisisin 2007-8, avoiding an economic recession experienced bymany other developed countries. Several factors have contributed to this success, including effective economic policyand regulation. Nonetheless, Australia continues to face many challenges and economic policy needs to be responsive to the changing national and international landscape. The recent federalelection highlighted importantdifferences between the major political (Labor and Liberal) partieson several key economicpolicies.
QuestionsPart A(Select any two of the following)
1.Negative Gearing: Should the government remove or reduce negative gearing on residential investment properties?
2.Minimum Wage: Should the government raisethe minimum wage?
3.CorporateTax Rate:Should Australia raise or lower the tax rate for corporations?
Part B(Select any two of the following)
4.Economic Growth and Stabilisation Policies: Should the government use economic stimulus to aid the country during periodsof low economic activity or recession?
5.Government Expenditure: Should the government make cuts to government spending in order to reduce the national debt?
6.Monetary Policy: Should the RBA continue to lower the cash rate?
In answering the questions above you are required to:
(a)Use the economic principles and models introduced in this unit to explain each of the existing policies or regulatory positions.
(b)Briefly outline the key differences between the major political parties on these policy issues
(c)Present your own position on each question, including the likely consequences on both efficiency and equity
Use diagrams where appropriate to help illustrate.

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