Economics: Discussion, Questions & Potential Solutions

[Joseph41]

This thread is for all exam-related discussion. Was it easy? Was it hard? What did you get for each question? Feel free to post any and all of your thoughts below.

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[DoctorTwo]

How did you guys go? I think I went fine except for the fact that I realised that I define aggregate supply wrong each time. I think I said it’s the ‘ability and willingness of businesses to produce’. Do you think I’ll lose a mark for this? Thanks.

[snip]

I think that actually went okay! I was pretty stoked when I saw there was only one 8 marker and one 6 marker, a nice change from last year's paper. The multis were generally pretty good I think, and I liked how the questions were more specific than last year's. I am concerned though that it was a little bit too easy, so it's probably going to be difficult to secure a high mark (although that's not the worst problem to have)
I almost ran out of time but that was completely my fault because I spent way too much time on all of the 3 markers. I realised I could possibly run out within the first twenty minutes but there was so much I wanted to say that it was hard to stop myself from elaborating on everything. I managed to answer it all though (I hope, unless I skipped a question which is a real fear), but I didn't have any time to check.

I'm so glad it's over! Good job everyone!

I think I said it’s the ‘ability and willingness of businesses to produce’. Do you think I’ll lose a mark for this? Thanks.

I hope not, because that's still relatively close and it'd suck to lose marks for something so trivial, especially if you answered the rest of the question correctly. Fingers crossed!

[Elayg6]

For the 8 marker question (a rise from 1.5%-2% interest rate by the RBA via the transmission channels), was it wrong to say that business and households increase C and I and therefore AD? Because the expansionary Monetary policy is indicated by a cash rate of less than 3.5% which is low enough to boost AD (but people said it was less expansionary cos the interest rate is essentially ‘tightened’). So what do you guys think was the correct answer to this question?

[snip]

I think I said that AD and GDP growth continued to increase but at a slower rate, or something like that. I thought it was pretty hard to word. I don't know if that's the best response though.

[S200]

WTF was up with question 7 mcq?

That was not and Aggregate supply curve!

And what did you guys do with Q14 MCQ?
The one about American inflation/Interest rates...

[Chelsea f.c.]

The opportunity cost of money is the nominal interest rate where an increase in the cash rate will decrease investment as companies must pay back interest on loans, so the incremental change is a decrease in investment and aggregate demand... your output consumption and investment are flow items remember... but it could be still noted that interest rates remain at near record lows

[snip]

WTF was up with question 7 mcq?
That was not and Aggregate supply curve!

What was q7 about, I don't remember it

And what did you guys do with Q14 MCQ?
The one about American inflation/Interest rates...

That was definitely my least favourite multi. From memory, I think I said an increase in interest rates and a decrease in the value of the aud. but i'm nowhere near sure of that. What did you say?

[Elayg6]

Q14 was B i think, increase interest rates and appreciation

[DoctorTwo]

Was question 7 the one about hats and cancer or something?

Also does anyone remember what q14 mcq was?

[hawkrook]

I think I answered most questions well, however my last two responses were extremely rushed because i got into serious time trouble at the end. I was writing so quickly that I question whether the examiners will even be able to read my handwriting.

One question that i wasn't sure about was the one about the strengths of immigration policy in boosting AS. What were we meant to write about? I just wrote about how it can quickly increase AS, in contrast to other policies like infrastructure development which would have taken a lot longer.

I also am not sure how we are meant to write 6 marks worth of content for the question about whether the government has achieved its goals of economic growth and full employment? For economic growth I just wrote about how the goal is 3-4% while not jeopardising other goals and that for the last two years growth has hovered around 2-3%, therefore they didn't achieve the goal.

[S200]

What was q7 about, I don't remember it

Something about an AD and AS curve, but the AS curve wasn't even a proper AS curve.

That was definitely my least favourite multi. From memory, I think I said an increase in interest rates and a decrease in the value of the aud. but i'm nowhere near sure of that. What did you say?

I did A, which I believe the same as your answer.

Was question 7 the one about hats and cancer or something?

Also does anyone remember what q14 mcq was?

Yeah, thats the one.

14 was the American economy having inflation, what happens to AUD

[snip]

I honestly reckon 14 could have been A or B because an increase in inflation in America would probably increase Australia’s international competitiveness and demand for the AUD so an appreciation.
But then increased interest rates in America would likely lead to less demand for AUD and a capital outflow resulting in a depreciation.

So yeah idk I didn’t really like that question, I’m hoping they accept both like they did last year.

[snip]

if it’s the hat one, q7 was about demand and supply not AD and AS so I reckon the graph was the right shape, if that’s what you mean. The near-vertical aggregate supply curve is only seen in Keynesian economics so pretty sure it doesn’t matter if you draw it straight or like that in terms of the VCE course.

[Chelsea f.c.]

With exchange rates it depends how you quote usd/aud or aud/usd... But an increase in the price level in america will mean Aussie products are relatively cheap so via no arbitrage usd should buy less aud so aud will appreciate