1)What is meant by expenditure-changing policy and expenditure-switching policy?

2)Three of the five government economic policy instruments are:

A. fiscal policy, structural policy, external policy

B. drink-driving policy, bullying policy, discrimination policy

C. multicultural policy, non-English speaking background policy, religious policy

D. school policy, housing policy, environmental policy.

1)Expenditure-changing policy refers to the policy that brings change in the volume of aggregate demand of the economy. It brings change in aggregate demand by changing the total expenditure of the country. Fiscal policy and monetary policy are the example of expenditure-changing policies.

Expenditure-switching policy is a policy that brings change in deficit in the current account balance. It tends to reduce the deficit in current account of the country.

2)The correct option is:

A. fiscal policy, structural policy, external policy

Fiscal policy is the government policy of public expenditures and taxation; targetted to economic stabilization and economic growth.

Structural policy is the government policy targetted towards the modernization of the structure of the economy.

The external policy includes the international trade and exchange policy of a nation.