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Economics

Governments in Australia have the potential to affect the leakages and injections, and the total gross domestic profit into the Australian Economy by acting as a balancing force. Figure 1.1 shows that the government affects this directly through taxation and government expenditure. The government's role is also to control the other four sectors in the circular flow of income and in turn control the rate of economic growth of the country. For the government to regulate the level of economic activity, they are forced to make legislative policies such as the monetary and fiscal policy. Fiscal or budgetary policy is an important tool of government. It attempts to smoothes out the economy by focussing on three main areas, relocation of reso

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