The 2010/11 Budget - EXPANSIONARY? (1 Viewer)

[Chromatic]

"Evaluate the likely macroeconomic impact of the 2010/11 Federal Budget"

Your answer should be between 100-150 words.

Is the budget expansionary or contractionary, because how I play to answer this question:

1) Overview of the expansionary OR contractionary budget, and its impacts on
- Eco growth
- Unemployment
- Inflation
- External stability
- Distribution Income/Wealth
- Environmental management

Help plz

 

[babysnow]

the budget is still in deficit. therefore, it is expansionary.

 

[Chromatic]

the budget is still in deficit. therefore, it is expansionary.

I <3 You

 

[Chromatic]

So that means its expanding the economy? Hence bad impact on inflation, possibly environment and income distribution, but good impact on unemployment, eco growth and external stability?

 

[timw7845]

So that means its expanding the economy? Hence bad impact on inflation, possibly environment and income distribution, but good impact on unemployment, eco growth and external stability?

expansionary is trying to create growth which makes jobs which then pumps more money back into the economy thus putting pressure on inflation..

look at rudds stim package.. that was the aim.. to pump funds back into the economy and create jobs though the BER..

but it decreases external stability as interest rates are down trying to encourage spending.. but not offering as high a return for foreign investment

contractionary is the opposite.. decreasing growth by higher interest rates which will increase external stability

 

[nutcracker]

the budget is still in deficit. therefore, it is expansionary.

not necessarily.
if the deficit is smaller than the year before (which it is), it can also be considered a contractionary fiscal stance.
because measures have been taken to cut spending.
at my school, in the latest exam, you got marks cut off if you called the current budget stance expansionary.

 

[babysnow]

not necessarily.
if the deficit is smaller than the year before (which it is), it can also be considered a contractionary fiscal stance.
because measures have been taken to cut spending.
at my school, in the latest exam, you got marks cut off if you called the current budget stance expansionary.

yes i understand what you mean. i discussed this with my eco teacher a few weeks back and he said that for this budget it is still considered expansionary. of course i suppose if you look at economic data now, we are in the midst of a booming terms of trade which has stimulated the economy... :3 but yeah hmm.