Economics Questions Thread

[abcdqdxD]

Net Foreign Debt affects net incomes as the associated interest payments are recorded as a net incomes outflow. Interest repayment on debt is a major component of net incomes. An appreciating AUD means interest repayments denominated in overseas currency will decrease in Australian dollars, thus reducing net incomes outflow, reducing the net incomes defecit, which decreases the CAD, meaning Australia has a greater chance of being able to meet associated payments of the CAD without debt increasing to a level which harms internal stability, that is, Australia would achieve external stability.

(You're answer was sort of relevant but what VCAA would have been looking for was the reduced interest repayments.

(Not an exam quality answer but I tried to explain it simply).

I agree with chasej. Difficult to give marks to what Zezima wrote because I don't think it was relevant to the question.

With regards to BOP, know the CAD super well, know the financial account well and capital account is rarely examined but good to know it briefly

[Jono_CP]

Thanks much appreciated

[Jono_CP]

Hey,

When I am dealing with 'trend type questions', obviously quite crucial judging from previous exams and our teacher has been stressing this point, how do I structure my answer?

E.g. if it is on the exchange rate and analysing it over the past 4 years do I just go: definition, state that it is 'cyclical' and select the relevant years/statistics of depreciation and appreciation?

Usually I just went definition, cyclical trend and stated the majority of the years as a way to fill up the lines. Whilst I got full marks for this, my teacher is telling me to be more selective of the years that I put down, which frustrates me as I find that I have an extra 2-3 lines to fill in the short answer.

Any advice on trend questions would be much appreciated.

Thank you!

[chasej]

Hey,

When I am dealing with 'trend type questions', obviously quite crucial judging from previous exams and our teacher has been stressing this point, how do I structure my answer?

E.g. if it is on the exchange rate and analysing it over the past 4 years do I just go: definition, state that it is 'cyclical' and select the relevant years/statistics of depreciation and appreciation?

Usually I just went definition, cyclical trend and stated the majority of the years as a way to fill up the lines. Whilst I got full marks for this, my teacher is telling me to be more selective of the years that I put down, which frustrates me as I find that I have an extra 2-3 lines to fill in the short answer.

Any advice on trend questions would be much appreciated.

Thank you!

If the paper shows you a graph and then asks you to describe the trend all you need to say is that "from x time to y time z was trending a, and from c to d y was trending b".

You don't have to explain the factor itself or how it moves, just describe the trend that it is showing you using the rough times and figures.

(Unless I misinterpreted what you were asking as it's getting pretty late )

[Jono_CP]

You interpreted my question correctly, but I am still lost with this approach.

E.g. it is impossible to fill up the lines of a short answer question merely by describing the trend itself without mentioning the majority of years. Our teacher tells us to be selective but not much else, which frustrates me because there are quite a few lines for just a trend question!

[abcdqdxD]

A higher currency doesn't necessarily suggest decreased investment. On the contrary, the AUD has been quite high post-GFC because it is viewed as a 'safe-haven' for investors in that the currency is stable because Australia is politically and economically sound. High interest rates in Australia relative to the rest of the world has also pushed up the value of the AUD and we have actually seen more investment inflows into Australia.

[abcdqdxD]

You interpreted my question correctly, but I am still lost with this approach.

E.g. it is impossible to fill up the lines of a short answer question merely by describing the trend itself without mentioning the majority of years. Our teacher tells us to be selective but not much else, which frustrates me because there are quite a few lines for just a trend question!

Trend questions are allocated 2 marks. One mark for identifying the nature of the trend, one mark for using stats correctly.

For example: Economic growth as measured by Real GDP has trended upwards from 3% in 2012 to 4.2% in 2013. If either of trend direction or stats aren't in your response then you will lose marks.

[Jono_CP]

Ok yeah makes sense. Thank you!

[millie96]

What are the consequences of zero/very low inflation?

[abcdqdxD]

What are the consequences of zero/very low inflation?

Low levels of economic growth

[Politics]

Just had my AOS 2 SAC today, i think i did pretty well, i was a bit offput by one of the questions (It wasn't an unusual question, but i just wasn't prepared at all) it was something along the lines of "Name two causes that cause inequity in income distribution" (it was a hypothetical question, we didn't have to relate it to current statistics or anything) and for one of my arguments i said Inflation. I said high rates of inflation greatly affects the poor as the rich can protect themselves better and the low income earners often find their real incomes decrease more relative to high income earners and this cause greater inequity (in essence). I spoke to a couple of people after and i got mixed feelings about it? What does you guys think? Myself i'm a bit iffy and will be happy with half a mark to be honest. 

[chasej]

Just had my AOS 2 SAC today, i think i did pretty well, i was a bit offput by one of the questions (It wasn't an unusual question, but i just wasn't prepared at all) it was something along the lines of "Name two causes that cause inequity in income distribution" (it was a hypothetical question, we didn't have to relate it to current statistics or anything) and for one of my arguments i said Inflation. I said high rates of inflation greatly affects the poor as the rich can protect themselves better and the low income earners often find their real incomes decrease more relative to high income earners and this cause greater inequity (in essence). I spoke to a couple of people after and i got mixed feelings about it? What does you guys think? Myself i'm a bit iffy and will be happy with half a mark to be honest.

You answered about a quarter of the question to be honest. Inflation is one out of two factors and you explained inflation half way. Like you said the factor and the outcome. But you really need to explain the why. Like explain richer people can invest in assets which increase in value with inflation, protecting real net worth. While poorer people lose real income (as their incomes buy less goods and services at higher prices).

A few other factors are indirect proportional taxes, workplace law changes, superannuation changes, changes in redistribution of income eg. Welfare and income tax.

[Jono_CP]

Ended Unit 3 with an A, overall 85%. Which would be top 3.

Stuffed up multiple choice 5/10 and then aced short answer 30/30 for the last SAC. Go figure...

Have I ruined my chances at gettin 20+ for Economics?

Chasej were you averaging like 90's to get the 40+?

[chasej]

Ended Unit 3 with an A, overall 85%. Which would be top 3.

Stuffed up multiple choice 5/10 and then aced short answer 30/30 for the last SAC. Go figure...

Have I ruined my chances at gettin 20+ for Economics?

Chasej were you averaging like 90's to get the 40+?

I averaged low 90's for U3, mid 90's for U4, both scaled up to 96/97 respectively. Got a low A+ on the exam which is what brought my score to low 40's.

You are definitely in good steed for a 40+ if you average 90+ after scaling on SACs. Top 3 is a good position provided the top 3 in your cohort A+ the exam, then you're set.

[Hannibal]

What's the difference between a financial crisis and a recession?

Thanks in advance