§-Quick questions
QLDEconomicsUnit 4: Contemporary macroeconomics
Quick questions on Aggregate supply policies and productivity (QCE Economics Unit 4)
8short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is aggregate supply policies defined?Show answer
Aggregate supply (AS) policies are measures that increase the productive capacity of the economy by shifting the long-run aggregate supply (LRAS) curve right.
What is rationale?Show answer
Strategic supply chain resilience, positive externalities from technology learning, alignment with the energy transition.
What are critics?Show answer
Productivity Commission and many economists argue Australia should focus on sectors of comparative advantage rather than pick winners. The 2023 PC Productivity Inquiry urged caution on industrial policy.
What is strong and sustainable growth?Show answer
AS policies raise potential output. The economy can grow faster without inflation.
What is full employment?Show answer
Skills training raises employability. Migration grows the labour force. Effect on the NAIRU is positive.
What is low and stable inflation?Show answer
Higher LRAS reduces inflationary pressure for any given AD. Productivity growth allows wage growth without inflation.
What is equity?Show answer
Skills training raises wages of lower-skilled workers (compresses wage distribution). Infrastructure in regional areas can support regional employment.
What is environmental sustainability?Show answer
Energy market reform, renewable energy investment, and the Safeguard Mechanism decouple growth from emissions.