macro vs. micro (1 Viewer)

[me]

hey ppl

i am really confused as to what policy options are used for what purposes. in last year's exam:

1. "Discuss policy options the Government can use to promote and maintain economic growth in Australia." ... now for that, the govt. can use both MACRO and MICRO policies right?

2. "Discuss policy options the Australian Government can use to achieve external stability." ... now is this macro or micro?? in the standard package, the person talked out CAD and balance of payments... how are those policy options?

 

[Mikowizzo]

hey me,

i rekon you can use macro or micro for both of those questions. Just that macro is short term and micro is long term, so any policy option that is appropriate will be fine =)
As with the CAD and balance of payments, they're not policy options, but they you need em in the essay to help explain external stability and then you go on to talk about the policies. hope that helps~

 

[me]

thanx heaps!!

 

[spice girl]

Well, i think macro deals with cyclical factors, and micro deals with structural factors, and both affect CAD and growth.

Now you mention it, you can't do any micro-policy on exchange rate, because you're not suppose to screw around with the structural level of the Aussie, you're only supposed to stabilise any fluctuations.

For Q1, "promote" => micro
"maintain" => macro

 

[Minai]

Originally posted by spice girl
For Q1, "promote" => micro
"maintain" => macro

That is a good summation there

The problem with those questions is that they are overly broad, since if u have to talk about both macro and micro, u could be going into 3 or 4 booklets (not to mention eating into your exam time)