Economics Trial exam Questions and results

[costargh]

This thread is for all questions that you find on your trial exams that are challenging etc and you want explained by other students. You can also put your results for exams in here.

Neap 2008- Hard exam in my opinion
82/90
I think my teacher marks easier than some other schools like marbs' school.

[marbs]

Some results;

81% on the Neap Exam
88% on Leading Edge.


A difficult question I came across for you all'

Explain why the current account deficit has not reduced even though savings have increased. (6 marks)


(I'll put the answer up later, and add some other questions that you may or not find challenging).

[costargh]

Lol umm ok ill have a go but its just some guessing...

-savings did not increase substantially enough to divert borrowings from overseas back to Australia
-the current loans abroad still have to be repaid, thus the interest on those loans abroad are still adding to the current account deficit
-While the level of credit in australia may have increased, the interest rates offered by financial institutions may represent a poor offer compared to overseas lenders.
-there are other components of the current account that may have increased. Eg. Imports relative to exports may have increased, canceling out any possible reduction in the cad.

im not sure if all of these are real reasons... they are just off the top of my head, hopefully at least one is right lol

[ReVeL]

Explain why the current account deficit has not reduced even though savings have increased. (6 marks)

Would the main reason be that even though savings has increased and borrowing from O/S has likely decreased, the net incomes section of the Current Account ivolves Australia paying large amounts of interest on borrowed money, hence the Current Account Deficit is likely to remain the same or continue to grow?

Seeing as it's a six mark question theres probably more that should be included. What did the answer say?

[AppleXY]

CAD =! savings.

As revel said, the financial account takes into consideration of borrowings/savings etc of the balance of payments system. Even though there has been an increase in savings, Net Income has most likely remained the same or increased thus resulting in a high CAD albeit high savings.

[deledio]

Is it possible for somebody to send me any of the 2008 trial exam papers?
We've only been given 2, and their no good anyway

[ReVeL]

Heh, a 'first poster' asking for exams. That's a first.

Nope, I don't have any sorry.

[sheepz]

hmm some random points i thought of (since it's a 6 marks ques):

- since aus is experiencing capacity constraints and our demand > productive capacity we need to spend on imports to satisfy our needs and wants -> worsen BOMT despite of increased savings
- the level of savings is still not enough to cover businesses' investment loans and foreign investors still want to inject their capital into aus due to the high interest rates (before sept and oct decreases)
- as people mentioned above, we already have the level of NFD and still have to pay our debts overseas = more debit in net incomes

oh can i argue that a lot of the increase in savings is through the increase in superannuation which isn't really lent out to businesses anyway? or are they actually lent out to them? from what i understand they are invested in secure shares...?

[marbs]

sorry hijaking thread for a sec

Where can I get that Australian Economic Statistics book? I think its party written by Forsyth

[cobby]

sorry hijaking thread for a sec

Where can I get that Australian Economic Statistics book? I think its party written by Forsyth

www.warringalpublications.com.au/pdf_downloads/VCE_Study_Packs_web.pdf

[cobby]

sorry hijaking thread for a sec

Where can I get that Australian Economic Statistics book? I think its party written by Forsyth

www.warringalpublications.com.au/pdf_downloads/VCE_Study_Packs_web.pdf

Idk if u will be able to go and pick up the books from them if the delivery takes to long??

[marbs]

thanks. I was hoping a shop like Landmark or Endeavour may have it. But I'l probs have to order it

[cobby]

thanks. I was hoping a shop like Landmark or Endeavour may have it. But I'l probs have to order it

yeh im pretty sure i saw endeavour have both those books ......when i went in there about 2 weeks ago...the one near dande bunnings ..idk if there are any other endeavour book stores?
and if u go through warringal, i doubt ud enjoy taking a trip all the way to coburg to pick the books up haha

[marbs]

thanks. I was hoping a shop like Landmark or Endeavour may have it. But I'l probs have to order it

lol yeh theres one in bentleigh thats closer i think

yeh im pretty sure i saw endeavour have both those books ......when i went in there about 2 weeks ago...the one near dande bunnings ..idk if there are any other endeavour book stores?
and if u go through warringal, i doubt ud enjoy taking a trip all the way to coburg to pick the books up haha

[costargh]

Marbs, do you have the answer to this question?

"Explain why the current account deficit has not reduced even though savings have increased. (6 marks)"