The Australian government recently scrapped its tax on carbo

The Australian government recently scrapped its tax on carbon emissions. All other things being equal, which of the following is most likely to result from this decision? a) Employment will increase and inflation will fall b) Inflation and GDP will fall c) Employment and inflation will increase d) Inflation and GDP will increase

Solution

The impact of Australian government to scrap taxes will reduce both inflation and GDP as the amount they earned due to this taxes is lost which inturn reduces GDP. As removing tax on emissions will have negative impact on country as it is encouraging pollution which is a bad sign in global market thus leading to reduce in inflation level.

Answer: Inflation and GDp will fall

19) Current Account = Exports - Imports + Net Income + Net current transfers

Current Account = 315 - 319 - 45 - 10 = -59 billion

Answer: Current Account defecit of 59 billion.

20) Current account = Financial + Capital account

59 = Financial Account - 5

Financial account = 64 billion

Current account defecit is always balanced by Financial account

So financial account is in 64 billion surplus \'

Answer: FInancial account is on surplus of 64 billion