Can someone here please explain to me factors affecting elasticity of demand, like I read this and I still don't get itHaving done Micro 1 at UNSW I can help you out here.
Thanks ;)
A few questions on globalisation if someone could help me with them :)
What is the impact of globalisation on the distribution of income in the Domestic Economy and In the global economy?
What is the impact of globalisation on the quality of life and economic growth in the global economy?
Three effects of a persistent CAD on external stability?
Hey,
I just had a question on how to prepare for the exam.
Mainly finding statistics and trends and examples.
For my other exams I've written practice essays and just found statistics when I need them, however these were only on one topic.
For trials, I don't really have time to write an essay plan for every part of the syllabus. So what trends should I be looking at to fill out a summary sheet that can be applicable for all questions across the syllabus.
Thank you :)
Hey,
I just had a question on how to prepare for the exam.
Mainly finding statistics and trends and examples.
For my other exams I've written practice essays and just found statistics when I need them, however these were only on one topic.
For trials, I don't really have time to write an essay plan for every part of the syllabus. So what trends should I be looking at to fill out a summary sheet that can be applicable for all questions across the syllabus.
Thank you :)
author=diiiiiiiii link=topic=166444.msg890270#msg890270 date=1469639942]
Hey there economics question!
Given the fact that the headline inflation rate fell down to 1%, what does this reflect about our economy? what impact will this have on the rest of the economy? and also how can fiscal policy be used to address this?
heyaaa Idk if anyone has already asked this, but what are peoples opinions on including graphs within your essays? My teacher said you could but I was wondering if it is really worth the time, and whether or not you will receive the same amount of marks if you just reference the statistics/changes demonstrated?
Thanks!
Does anyone have any good acronyms/mnemonics/devices etc for remembering information about exchange rates? like what causes it/the effects etc?? I'm planning on avoiding it if its an essay question, but I want a good way of remembering it, just in case :) :)
Noooo idea (lol economics) but I found a cool info graphic here!
Fantastic! We've now got our own personal researcher! (seriously though that's v helpful thank you :D :D)
Fantastic! We've now got our own personal researcher! (seriously though that's v helpful thank you :D :D)
I tried coming up with an mnemonic device using the descriptors, the best I could do was CIGGIS sorryThat's so laughable I might actually remember it ::)
Also, economics lolFight me hahahahahaah
In the prelim topic "markets", what are they referring to? (i.e. are they referring to businesses or stores like K-mart or what)
Try to think of it in the way that I have listed below
The first few subsections within markets - supply, demand and equilibrium are applicable to all markets in that each market will have a market equilibrium that is influenced by changes in supply and demand.
Hey, from what I remember.
The topic of markets is an introduction into the different kinds of markets. E.g.
Financial Markets - forex and domestic
Product Markets - market for goods and services (so like Kmart and other businesses)
Factor Markets - market for factors of production
Labour Markets - market for human capital
The first few subsections within markets - supply, demand and equilibrium are applicable to all markets in that each market will have a market equilibrium that is influenced by changes in supply and demand.
Help please !!For the first one (q18) you need to find the simple multiplier (which will be the same for year 2-3)
Haven't done these since term 1 and I've gone completely blank. : ^ (
Thanks in advance !
For the first one (q18) you need to find the simple multiplier (which will be the same for year 2-3)
The MPC will be change in consumption/change in income
So 40/50 = 0.8
And the multiplier uses the MPS which is 1-MPC so
1-0.8 = 0.2
k = 1/MPS
k(multiplier)= 1/0.2 = 5
calculating the change is always the same
Change in national income = k x change in exports (for this question)
100 = 5 x change in X
100/5 = 20
Change in X = 20
I hope that makes sense :) its a bit of an eyesore (I can write it out if you want) but I have no idea how to do that fancy maths input that everyone else uses sorry
Does anyone here remember how to calculate tax brackets (like in junior financial maths)
I'm having a mind blank at the moment and don't remember how to
Thanks ;D
Whats the difference between comparative & absolute advantage? And how is it numerically compared?From my economics course, the party that has a comparative advantage is that of whom has the lowest opportunity cost of partaking a particular action.
I came across this question in the Tim Riley workbook (Chapter 2 MC Question 16).
From my economics course, the party that has a comparative advantage is that of whom has the lowest opportunity cost of partaking a particular action.
As opposed to the absolute advantage, which is the party that can perform the action using the least amount of resources.
Numerics wise: Well, if a country has an absolute advantage then the resources required will be the least. That's pretty simple.
Not sure if you've been taught the opportunity cost formula but I learnt it as
OC(Action X) = (Loss in Y)/(Gain in X)
And you want that number to be at the least basically.
Could you fill me in on opportunity cost @___@?Informally, opportunity cost is basically what you had to forego to get what you chose to get.
Whats the difference between comparative & absolute advantage? And how is it numerically compared?
I came across this question in the Tim Riley workbook (Chapter 2 MC Question 16).
watch this: https://www.youtube.com/watch?v=FpTBjRf8lGs its a bit of a weird way of explaining (also try to ignore the background music hahahaha) it but it helped me when I was learning it (I also think its not something that isn't necessary? I just think lots of independent papers use the calculation?)
Basically who has the lowest opportunity cost?
Whilst you guys talk about countries I just talk about shops...
What difference is there if you're talking about them both in terms of economics?
What difference is there if you're talking about them both in terms of economics?Yeah none whatsoever.
Hey guys,
I came across a question and I wasn't sure how I would answer this. Does anyone have any thoughts?
Thank you guys!!!
"Discuss TWO reasons for the convergence of economic growth patterns between different economies" - 4 marks
Informally, opportunity cost is basically what you had to forego to get what you chose to get.
A more refined definition is that it is the value of the next best alternate action, to a particular action. This means say you were choosing between producing T-shirts or trousers (and for this example's convenience, say that their price tag were the exact same). It takes you 1 hours to produce a T-shirt but 2 hours to produce a pair of trousers.
So the opportunity cost of producing the T-shirt would be "one half" of a pair of trousers.
Conversely, the opportunity cost of producing the pair of trousers would be two T-shirts.
If their price were the same, you would go for T-shirt production.
(Note: Time was treated as a resource for this question.)
In a one-person economy, well you'd be producing T-shirts.
In a multi-person economy, you'd have to think about who has the comparative advantage in what. Whoever has the comparative advantage (but not necessarily absolute advantage) is whoever should be producing that good/providing that service.
(Note: Comparative advantage has to be determined with a basis. This is because it's valuing the next best alternative. There's not always an alternative.)
So. Just to clarify. Lowest opportunity cost is when the production is not as compromising as an alternate option?You do want the number to be low.
Hey guys,
If someone could please impart their knowledge regarding topic 4. I would really appreciate it
When is the law of demand applicable?In general, always.
So. Just to clarify. Lowest opportunity cost is when the production is not as compromising as an alternate option?
So. Just to clarify. Lowest opportunity cost is when the production is not as compromising as an alternate option?
This is a summary of what the syllabus has to say to about Topic 4.
Hey, can someone help me with monetary policy as in the use of selling/buying CGS on the economy, cash markets and how the RBA's actions influence the economy ( appreciation/depreciation, investment, and whatever else ) (like i know the general gist of monetary, like the RBA lowers the cash rate to stimulate the economy but the multiple choice questions that they ask i can never get right )
Hey, on a AD or AS supply, how would i know by inspection if its increased or decreased e.g it says A --> A1 and the picture shows a shift to the right of the AS curve, dont have a question sorry but i hope this is enough information
Also, i attached a quota diagram below and i dont know how to visually read it
thanks guys
Hey, can someone help me with monetary policy as in the use of selling/buying CGS on the economy, cash markets and how the RBA's actions influence the economy ( appreciation/depreciation, investment, and whatever else ) (like i know the general gist of monetary, like the RBA lowers the cash rate to stimulate the economy but the multiple choice questions that they ask i can never get right )hello deng! even though hermanasia put a nice explanation, I guess it wouldn't hurt for another style of that explanantion!
If we lower interest rates, economies are more likely to want to borrow from us right? Lower interest to pay so higher the demand. So to lower demand, our interst rates must be raised. Now think about it. If we buy Australian Dollars, we would limit the supply in the international market so A and B are out. So in order to increase supply, we would have to sell $US to put more $AU in the market.From my sources, higher interest rates = higher demand. why? because foreign investors want to lend money to aust in order to receive a higher return. how does this affect demand? when lending money to aust, they have to buy the aust dollars first; thus there is a higher demand for the aust dollar = increased exchange rate. conversely, decreased interest rates = lower demand.
Hi guys! I was wondering if anyone could explain the total outlay method to me and how you can determine elasticity from it? Thanks, I've been having issue with this one for quite a while ;Dhey there!
hello deng! even though hermanasia put a nice explanation, I guess it wouldn't hurt for another style of that explanantion!
okay, so monetary policy is basically the actions taken by the RBA to influence the cash; and hence, concurrently the interest rates in other financial market. Like you said, the predominant monetary policy is the use of domestic market operations : which is essentially just the buying/selling of CGS in the cash market - or otherwise the overnight money market (Note that this is the secondary market we are talking about). As such, there are two stances of monetary policy:
contractionary/tightening
This is when the RBA sells the CGS in order decrease the money supply in the economy. the main reason for this is because they want to slow down economic activity in the case of inflation. In other words, the banks in the cash market buy these government bonds. Now just imagine the RBA as a MASSIVE safe that locks away this money from selling CGS. therefore, there is lower money supply in the economy, thus the rate for borrowing in the cash market increases. the cash rate increases. subsequently, because the banks have to pay more to borrow money which then spills over to the long term money market. aka, the rise in cash rate = rise in interest rates = more saving, less spending, more foreign investment
expansionary/easing
basically the opposite. the RBA buys the CGS to increase the money supply in the cash market = lower cash rate (or borrowing rate in the cash market) = lower interest rates = more spending, less spending, more borrowing to spend etc.
with q3)
I think I disagree with hermanasia?? (I might be wrong)From my sources, higher interest rates = higher demand. why? because foreign investors want to lend money to aust in order to receive a higher return. how does this affect demand? when lending money to aust, they have to buy the aust dollars first; thus there is a higher demand for the aust dollar = increased exchange rate. conversely, decreased interest rates = lower demand.
Likewise, to buy US dollars, think of aust as trying to sell goods/services - aust sells stuff and US buys this stuff = aust is essentially buying US dollar = aust converts this USD to AUD in aust = more money in the domestic economy to spend = higher supply.
so yeah, q3) is to buy US dollars and decrease interest rates....I think.
q2) basically, RBA buy securities = more money supply = induce spending etc.
ELASTIC, means that even a slight change in price, will incur a greater change in demand for that product. Applying this to the total outlay method/ total revenue method, If T.outlay moves in the opposite direction to change in price, demand is elastic. note: both T.outlay and price can move in whatever direction they choose to - eg decrease or increase. As long as they are in opposite direction, it is demand elastic.Is this how they teach it to you guys in HSC Economics? Because elasticity is, by definition, just a measure of the responsiveness to a change in price in the quantity demanded.
INELASTIC, means that a change in price will essentially have zero impact on the demand. So if T.outlay moves in the same direction, then demand is inelastic. note: again, T.outlay and price can move in any direction. As long as both move in same direction, it is demand inelastic.
UNIT ELASTIC, means that despite a change in price, there is no change in T.outlay.
Having done Micro 1 at UNSW I can help you out here.Note: Elasticity < -1 implies elastic
Note that the elasticity of demand is a measure of responsiveness as to a change in price. It is basically the change in quantity demand for a small change in price.
(Keep at the back of your head that according to the law of demand, consumers have a greater willingness to buy more in quantity when the prices are low.)
Is this how they teach it to you guys in HSC Economics? Because elasticity is, by definition, just a measure of the responsiveness to a change in price in the quantity demanded.yup its kinda weird right??! But then again, this is just a method to know. :)
I was just reviewing my unemployment essay (which I related to EG as an extension) and saw this "rising output gap" comment but unsure to what it means and how it relates to rising unemployment.Hello Klexos!
Hello Klexos!
Basically, the rise in unemployment to 5.8% as a result of the GFC, ultimately lowered the demand for output (as you stated) - which is THEN reflective of lowered economic growth. So in context, the rising out put gap means that the difference in the demand for output, hence production, DURING the GFC and PRE-GFC is increasing.
Gradual increase of unemployment = gradual decrease in demand + production of output = increasing difference/ gap in output before and during/lead up to GFC.
If it helps in any way, think of "rising output gap" as in increasing gap in output rather than rising output in general.
Hi! Thanks for your response :DNo probs! ;D
Hey guys how would i read tariff diagrams? as in how much do consumers spend, government revenue, and all that all i know is the new import level where it contracts to the new S and D curve points
Thanks
I understand that part of the tariff diagram after spamming yt about it but how would i do this one ?
Thanks!!
Now that the price is $50 not $40, it should be $50 x 700 units demanded = $35 000 so C?
Although the answers for this says D... so I'm not sure hahaha :-\
Hey, just curious how would i improve my economics essay skills for example in exams my short answer and multiple choice are generally fine however i always seem to bomb my essays. For example in my trials i had an exchange rate stimulus and a unemployment essay where it all went downhill. Part of my issue with essays is not knowing the whole syllabus extensively enough to sustain a strong argument for the whole essay so i guess what are ways to remember/understand the whole syllabus to a high extent ? ( other than continuous study ( already do so ) )Hey there!
Can someone help me with these? How do you work out the appreciation/depreciation from its value against another currency?Yo! So to calculate appreciation/depreciation is given by:
Something that confuses me because of notational differences and differences in videos online:
Given nominal GDP and the CPI outcome, what is the working to find the real?
Some divide the nominal GDP by the CPI, some reduce nominal GDP by eg. 25% (for a CPI of 125).
Can someone clear this up for me? Thanks
Given nominal GDP and the CPI outcome, what is the working to find the real?Just to add on to brontem 8),
Can someone clear this up for me? Thanks
Explain how non-equilibrium market situations for surfboards can be resolved through the operation of the price mechanism (4 marks)Basically, its saying in a non-equilibrium market situation, where supply does not equal demand, there is either a shortage or a surplus of surfboards.
Hey guys,the main points i would give would be to :
This is mad that the economics side of this site has grown, it is great !
Got back our trial paper today and I got 82/100, topped the exam. I know I should be stoked, but I am after a band 6 in the HSC exam, so any ideas on how to bump my way up there?
Could someone explain this question.
which of the following methods of financing an expansionary fiscal policy will be more likely to cause higher inflation?
1. borrowing from the Reserve bank
2. issuing government securities for the sale in the domestic market
3. issuing government securities for sale to foreign investors in a foreign currency.
4. selling government assets
Answer is A
Thanks
Hey wondering if someone could please help with these short answer questions
Explain how changes in the level of domestic interest rates impact on Australia's balance of payments.
- Note that the conduct of monetary policy is geared towards inflation targeting (keeping inflation within the 2-3% band) however changing the IR can impact upon Australia's BoP
- Increases in IR can dampen economic growth and help to lower inflation. Imports are a function of domestic economic growth and so reducing growth will reduce our demand for imports, thereby improving our BoGs should our exports remain unaffected. However interest rate differentials between national economies can result in capital inflows (remember that most of the advanced economies have interest rates near 0% with the EU having negative interest rates, hence increasing IR will lead to greater capital inflow as investors find it more attractive to invest here (due to higher returns)). This results in increased surpluses on our financial account which will lead to an increased CAD as they balance out under the exchange rate mechanism.
- Decreasing IR can stimulate economic growth and can lead to an increase in imports which reduces the size of our net exports, potentially widening our net exports. This is due to the fact that subsequent structural changes in the economy have "hollowed out" many of our manufacturing sectors etc. therefore we rely heavily on overseas to import consumer goods. Decreasing IR can also lead to capital flight if other national economies have higher interest rates which can lead to reduced surpluses on the Financial account.
Briefly outline one macroeconomic policy that could be used by government to improve Australia's balance of payments.
- One macroeconomic policy that the government can use is to achieve fiscal consolidation by achieving consecutive budget surpluses, stabilising debt and reducing the amount of interest the government has to pay on its debt. According to the twin deficits theorem S -I + T - X = X - M. (T - X) being the Public Sector Underlying Deficit (PSUD), if the government maintains fiscal discipline and reduce the PSUD, they can reduce the size of the CAD represented by (X - M). Furthermore, by running budget surpluses, the government increases the pool of national savings, closing the savings investment gap whilst also mitigating the "crowding out effect" that is the government competing with private sectors for national savings, forcing the private sector to borrow overseas which is cheaper.
Cheers
Hey guys, i got my trial marks back and was wondering how i can improve on "referring to the stimulus".
My teacher said that inserting figures and quotes from the stimulus isnt actually referring to it and i should use it as the basis of my essay
Thoughts on this ?
Still havent been handed back our exams as our teacher has to photocopy them and whatnot, but i understand what youre saying it echoes that of my teacher.
Also, do you know any places where i can get comprehensive timelines of inflation,employment, economic growth etc with the causes or should i make them myself to solidify my knowledge ( kinda lazy haha )
Hey guys im wondering if i post a draft essay does it require the 15 posts thing
Hey guys im wondering if i post a draft essay does it require the 15 posts thing
You can definitely post a practice essay! But since there are no mods on this thread the feedback may not be as good as the english/math thread + since we students marking may take longer!
I'll raise you one with an idea.. I'm willing to share my essays with people if they're willing to post theirs too?? I deliberately picked the options (in the trial) that I knew how to do and I don't know how I'd answer the others/questions from other papers!! (Also might help with the people who want theirs marked too..)bump
Just an idea ;D ;D I'm also really lazy
At this point, I have NOT asked anyone to offer a free essay marking service for economics. Only for help.
As if my schedule wasn't busy enough, Ying's is 5x worse. I can tell that she's not going to have the time to deal with all of those, at least, not with a reasonable speed. If you guys want to share essays and mutually offer feedback you are more than welcome to. I personally believe that for mutual feedback:
a) Because it's among just yourselves, there will NOT be a required post count to put up an economics essay as of present. I may need to make the moderators aware of my decision.
b) You may seek to have your essay deleted IF nobody offers feedback.
c) You guys are the boss of it. Play fair and offer constructive feedback. lol
Whether you choose to post your essay here or start another thread is up to you. But I'm not going to bug Ying about an essay here because I'm not going to overburden her.
I'll raise you one with an idea.. I'm willing to share my essays with people if they're willing to post theirs too?? I deliberately picked the options (in the trial) that I knew how to do and I don't know how I'd answer the others/questions from other papers!! (Also might help with the people who want theirs marked too..)
Just an idea ;D ;D I'm also really lazy
Really general question here. But I've noticed that the HSC Economics exam is much much harder than the trials (both CSSA & Independent), maybe some of you find it fine (which is good!) - how have you been able to do these papers?I've noticed that too :'( the only way to do it is to do every past paper possible unfortunately. Some of the questions in some HSC papers are really weird, there's always one in there that's just strange or really difficult to answer. I just try to write down everything that I know and then crosscheck with the sample answers, and then list down the things that stump me and go over it.
Something that has always bothered me and I'm not sure how it works:
Budget of 37.1b is -2.2% GDP
CAD of 15.5b is -4.6% GDP
?
Hey i was wondering to what extent we need to know our case studies. The syllabus is very vague in the sense that it doesnt outline specific areas rather just the influences of globalisation on the country and the strats used for EG and ED.
In 2015, they had a question on Environemntal Sustainabiliy which is specific ( not sure where im going with this tbh ) but yeah was wondering if anyone had a clear idea 'what is enough' or is that something you can't determine
Just a question to ask all you economics students but is the HSC course funner than the prelim course because to be honest, I dreaded the prelim course to bits as I thought it was very theory dense and quite boring
Hi, i wanted to ask a question about the structure of the economics HSC exam. So is there a specific layout for the exam? e.g. topic 1 will be MC, then topic 2 will be short answer, then topic 3 will be essay question etc. In other humanities subjects like SOR and Legal, there is a strict layout for the hsc exam, is this the same case for economics?
Hi, i wanted to ask a question about the structure of the economics HSC exam. So is there a specific layout for the exam? e.g. topic 1 will be MC, then topic 2 will be short answer, then topic 3 will be essay question etc. In other humanities subjects like SOR and Legal, there is a strict layout for the hsc exam, is this the same case for economics?
Okay thanyou, but what i was supposed to ask was will each section (multiple choice, short answer and essay questions) be a combination of all 4 topics or just one or two topics for each section. e.g. in legal studies, section 1 - 15 multiple choice are dedicated to crime, 5 are dedicated to human rights, then section 2 will will be a few short answers on human rights, then essay on crime, then section 3 will be essays on options. Do we know the topics that will come in the MC, short answer and essays or will it just be a combination of all 4 in each section?
Okay thanyou, but what i was supposed to ask was will each section (multiple choice, short answer and essay questions) be a combination of all 4 topics or just one or two topics for each section. e.g. in legal studies, section 1 - 15 multiple choice are dedicated to crime, 5 are dedicated to human rights, then section 2 will will be a few short answers on human rights, then essay on crime, then section 3 will be essays on options. Do we know the topics that will come in the MC, short answer and essays or will it just be a combination of all 4 in each section?
Hey guys,
I was looking through the ABS analysis of the 2016 March and June QTR BOP, and I was confused by BOGS deficit being larger than NPY deficit as was the 2016 March qtr (-$7996m and -$7160 respectively). Since historically BOGS has always been less than NPY (even in surplus at times), can anyone shed some light as to why this has occurred and what the implications are on the rest of the Australian economy.
Thank you :)
Essay marking service may be coming soon. Stay tuned :)
Hey guys, can someone explain to me the relationship of low wage growth and deflation? and the factors causing low wage growth?
Would low wage growth mean consumers have a lower APC/MPC which reduces their confidence in purcahasing goods and services, which puts pressure on firms to reduce their prices to stimulate demand ?
Thanks
If wages growth is low: there is less cost for businesses to pay for labour, and there will be less of an impact on production costs; wages are a large (the largest?) cost of production. Input costs are low --> Price increases aren't passed on to consumers (because there is no price increase)
Likewise, if there is low inflation, there is no need for wages to increase (no need to accommodate for increase in prices since there is no increase)
As far as I know, low wage growth isn't the reason for prices to change, if thats what you mean? Low wage growth is the result of low growth/inflation/demand (as far as I know..) kind of like the opposite of the wage-price spiral :)
As for what causes low wage growth is usually low inflation, low demand for labour & low labour productivity.. basically there is no increase in wages because there's no need for it :)
Hey guys, can someone explain to me the relationship of low wage growth and deflation? and the factors causing low wage growth?
Would low wage growth mean consumers have a lower APC/MPC which reduces their confidence in purcahasing goods and services, which puts pressure on firms to reduce their prices to stimulate demand ?
Thanks
Hey guys, can someone explain to me the relationship of low wage growth and deflation? and the factors causing low wage growth?Hey there,
Would low wage growth mean consumers have a lower APC/MPC which reduces their confidence in purcahasing goods and services, which puts pressure on firms to reduce their prices to stimulate demand ?
Thanks
Hey guys, i was wondering for eco what is the minimum knowledge of graphs and theories we need to know for the whole course e.g AD/AS, J-curve, pitchford thesis, twin deficit etcOff the top of my head:
Thanks
Hey guys, i was wondering for eco what is the minimum knowledge of graphs and theories we need to know for the whole course e.g AD/AS, J-curve, pitchford thesis, twin deficit etc
Thanks
Hey guys, i was wondering for eco what is the minimum knowledge of graphs and theories we need to know for the whole course e.g AD/AS, J-curve, pitchford thesis, twin deficit etc
Thanks
hey!
this might by a really silly question but i was just wondering
is there any difference between the 'net foreign debt' that is within the equation 'net foreign debt + net foreign equity = net foreign liabilities'
and the net foreign debt you see by itself e.g. when you have 'net foreign debt as a % of GDP' and 'net foreign liabilities as a % of gdp'
sorry if this doesn't make sense
thanks
Hey here are some of the basic ones I recommend,
Topic 1:
- International/regional business cycle
- Methods of protection - tariffs, quotas, subsidies
- AD/AS - for both domestic and global - also use for economic issues and policies
- any theories/projections associated with your case study
Topic 2:
- Pitchford thesis
- Twin deficit Thesis
- Debt trap thesis
Topic 3:
- Keynesian general theory of employment, interest and money
- Keynesian cross diagram
- Multiplier theory - for both economic growth and decline
- Philips curve - long and short run
- NAIRU
- Okun's law
- Wage price spiral
- Deflationary spiral
- Lorenz curve
- Gini Coefficient
- Theories on why some demographics are more disadvantaged than others
- Tragedy of commons theory
- Externality theory and diagrams
Topic 4:
- Rationale for Macro and micro reform
- Crowding out theory
- DMO graph
- Theories on productivity growth
There may have been some I missed though so make sure you check textbook and syllabus - but apart from that make sure you know the content and can elaborate and argue for and against most of the dot points. Also have some trends and statistics ready to use in essays and short answers.
Good luck, hope this helps :)
The tragedy of common theorys sounds familiar but i cant remember what it was exactly, can you care to clarify ?
The tragedy of commons is an economic problem whereby individuals tend to exploit shared goods and/or services (e.g the environment). This can cause a disequilibrium in supply and demand (as demand > supply). Price of the commodity increases above the equilibrium meaning that the market is inefficient since there is an over demand.
How many bilateral and multilateral trade agreements do we need to know? 1 each?
Hey guys, just some multiple choice which i dont particulary understand and would like some clarification
Also the tariff question in the 2011 hsc multiple choice, my laptop cant pull up the paper for some reason, hopefully theres only one, its something about changing the price of the tariff and revenue
Thanks
How many bilateral and multilateral trade agreements do we need to know? 1 each?
Hey Deng,
Here's what I think the answers should be, I might be wrong though so hopefully someone else can shed some light.
18. Growth rate of real GDP in Year 2 - A
For this question you have to calculate real GDP growth for year 1 and 2.
To do this you calculate AD by adding up C + I + G + (X-M) then you times this figure by 100/CPI in order to get the Real GDP for that year then using (Current-Previous)/Previous x 100 you can find the growth rate
Year 1:
Real GDP = (500 + 200 + 300 + 100 - 100) x 100/CPI
= 1000 x 100/100
= 1000
Year 2:
Real GDP = (550 + 250 + 300 + 200 - 200) x 100/CPI
= 1100 x 100/110
= 1000
Therefore Real GDP growth is 0%
7. Best policy response - D
From the table we can see that GDP growth has increased by 0.5%, inflation has increased by 1.1% and unemployment has decreased by 0.5% - through short run Philips curve, we know that economic activity is high and is reaching full capacity, so contractionary measures are necessary
The question also tells us that the inflation target is 2-3%, since the economy's inflation rate is .8% above the target; it must tighten economic activity in order to dampen spending and reduce inflation - this can be achieved through contractionary fiscal and contractionary monetary policy
14. Account for changes - D
For these types of questions, I suggest looking only at half and then narrowing your choices.
So looking at the first column "Reason for change in unemployment rate" we can see that the unemployment rate has decreased.
A is wrong as a global recession would increase unemployment since labour is a derived demand
B is wrong as fewer incentives to hire the l/t unemployed would result in an increase in unemployment since there is no reason to hire
Looking at the second column - the participation rate has decreased showing that either the labour force has decreased and/or the working population age has increased as participation rate = labour force/working age pop.
C is wrong as an increase in childcare subsidy payments would encourage stay at home mothers/fathers to rejoin the labour force thus increasing the participation rate
D is the right answer (I think) as an increase in consumer confidence would increase Consumption and AD thus increasing the demand for labour and decreasing unemployment. Increasing school retention rates would mean that there would be more students and less people dropping out and joining the workforce in the short/term. As students are not counted in the labour force the size of the labour force decreases whilst the working age population is the same.
17 - Monetary Policy - C
When the RBA purchases Commonwealth Government Securities they are increasing the supply of money in the overnight money market and effectively decreasing the cash rate of which banks should decrease interest rates (eventually). Through loosening monetary policy, Australian GDP rises as it is cheaper to borrow money and thus consumption and investment should increase.
On the other hand, a lower interest rate would deter overseas investors from putting their funds into Australian banks as there is a lower rate of return thus decreasing the demand for the Australia and causing a depreciation. Further increasing consumption and availability of credit could increase Import spending, increasing the supply of AUD on the FX market and causing a depreciation.
Hope this helps, not sure if these are right so hopefully someone else can give their view :)
anyone know how to do this q ? thanks !!
yea it is A :))) thanks that helped, also for this Q i picked A because i thought when the currency is appreciating it means that foreign investors are investing in australia thus there wud be net foreign liabilities would increase as australia would need to pay back foreign countries through interest. The ANS is B and not quite sure why.. anyone help clarify? THANKS
Hi there,
I think that the answer is A as inflation makes the general level of prices go up. Thus assets like cars, houses, shares or material possessions suddenly have an increased net worth and can sell their assets for higher prices.
Whereas those on fixed incomes or pensions are worse off as inflation erodes real incomes since they cannot buy as many goods and services, thus their living standards decrease.
Hope this helps - hopefully hermansia can give her insight though :)
Would it be likely that our case study will be in the short answers again since it was in the 2015 ?Well predictions are that the case study will be an extended response this year.
Anyone explain this Q please? thank you so much :))))
Anyone explain this Q please? thank you so much :))))
Anyone explain this Q please? thank you so much :))))TBH, B doesn't really pop up as the answer for me. Yes increased investment into Australia causes an appreciation of the AUD. But this is because there is increased demand not through reduced supply. My thinking as to why the answer is C is because there is a deficit in the income component on the current account ie income debits > income credits. This means that more AUD is supplied by Australians in the foreign exchange market so they can obtain foreign currencies and pay off foreign loans or investments. A reduction in this income deficit would mean that there is less income debits and thus less AUD being supplied in the market.
For macroeconomic policies and more specifically fiscal, would it be more relevant for me to talk about fiscal policy during mining boom etc since i think from 14(?) onwards most fiscal policy has been rarely implemted due to political constraints i.e Hockey's zombies measuresNo, I don't think focusing strictly on macro/fiscal policy a decade ago is a good idea. If anything, if the question asks you to evaluate the effectiveness of recent macro polices, you'll be set in criticising the crap out of the recent budgets. So i definitely think you should include current conditions of the economy in your extended response.
Thanks
No, I don't think focusing strictly on macro/fiscal policy a decade ago is a good idea. If anything, if the question asks you to evaluate the effectiveness of recent macro polices, you'll be set in criticising the crap out of the recent budgets. So i definitely think you should include current conditions of the economy in your extended response.
For macroeconomic policies and more specifically fiscal, would it be more relevant for me to talk about fiscal policy during mining boom etc since i think from 14(?) onwards most fiscal policy has been rarely implemted due to political constraints i.e Hockey's zombies measures
Thanks
The only issue is they havent exactly been implemented or to my knowledge have been, which means you cant exactly evaluate them because you would be hypothesising the effects which may or may not be occurring.I see what you mean there. But I guess maybe some things markers will look at is your hypothesising. If you can analyse aspects of the budget and their affect on the economy, I'm pretty sure even though you are hypothesising, you are expressing your economic knowledge. Of course, your essay should include items a few years back and if you want even during the mining boom.
What i mean is that they are planned, but they arent necessarily put into place yet for example if they fail to pass through senate and its increasingly harder now since they only have 1 seat majority. Best example is Joe Hockey's budget and most of his reforms such as family tax benefits and other welfare stuff have failed to pass the senate, which we can speculate the impacts on distrubtion of income but it would become speculative. Also, economic theory doesnt always hold true ( cant remember exactly but my teacher once showed us an example where economic theory didnt occur in real life application hence me being hesitant on writing about things that may not happen )
Heeey,
This is regarding fiscal policies and government spending. When the government changes its annual fiscal budget, is this regarded as a macroeconomic policy? When these revenue and expenditure gets altered throughout the year, affecting only specific areas (eg. taxation), would it now be considered a form of micro economic reform. Also, what category does automatic stabilisers fall under?
Thanks in advance!
Heeey,
This is regarding fiscal policies and government spending. When the government changes its annual fiscal budget, is this regarded as a macroeconomic policy? When these revenue and expenditure gets altered throughout the year, affecting only specific areas (eg. taxation), would it now be considered a form of micro economic reform. Also, what category does automatic stabilisers fall under?
Thanks in advance!
heyy! can i please have some help with this, and tariff diagrams in general :)For Q19:
heyy! can i please have some help with this, and tariff diagrams in general :)
(Note: I did this from university economics. Might be a bit advanced.)
on the note of tariffs, how would i do this one, its different from the usual onesHere you just need to consider what the change is.
on the note of tariffs, how would i do this one, its different from the usual ones
Wait, Rui has 2000 and Hermansia has 500 ?Which is scaring me...
Which is scaring me...
Except I dug up the paper and checked my answer with BOSTES's...
It came from 2011.
Hello :)
Can someone please explain the process of a sterilised intervention in the foreign exchange market and why the sale/purchase of foreign currency needs to be offset by a purchase/sale of CGS?
Hey there birdwing,
A sterilised intervention in the foreign exchange market is basically "dirtying the float" it is a direct intervention of the RBA who enters the forex market and buys and sells currency in order to alter the exchange rate. This requires reserve assets in other currencies in order to buy and sell AUD.
E.g. In 2008, when the AUD depreciated against the USD, the RBA purchased $3.3bn of AUD to appreciate the dollar
Although I'm not exactly sure what you mean by "why the sale/purchase of foreign currency needs to be offset by a purchase/sale of CGS?" using monetary policy is an indirect way of influencing the exchange rate. I don't think that they are meant to be used concurrently to offset each other; but I might be wrong here
Hope this helps :)
Sterilised foreign exchange market intervention occurs when the Reserve Bank offsets its transactions by buying or selling the equivalent amount of government securities, leaving the monetary liabilities of the Reserve Bank unchanged. For example, a sterilised sale of foreign currency involves the RBA selling foreign currency, which takes Australian dollars out of the financial system, but it then buys sufficient government securities to inject the same amount of Australian dollars back into the financial system. There is thus no change in the domestic money supply or domestic interest rates.[/i]
I'm confused about the second section, where it says 'the RBA sells foreign currency, which takes dollars out of the financial system', as I don't quite understand why that's the case :( I did some research and thought I understood it, but then I read over this and it didn't make sense to me.
My question, then, is why does the RBA take dollars out of the financial system when it sells foreign currency?
Sorry for the confusion (and thanks for your help)
hey!
Can anyone help explain the concept of NAIRU to me? its still a bit confusing... I get that its the point where there are no cyclical unemployment and only structural etc... but what does it mean when unemployment is " BELOW" the NAIRU and why does a lower NAIRU increase the economys capacity to grow without increasing inflation?
Hi Birdwing,
The RBA has a reserve of assets (such as foreign currency) which it uses in sterilized intervention. If the RBA sells its foreign currency, then the buyers will give $AU to RBA in exchange for the foreign currency. This means that the supply of $AU is reduced in the world market which is akin to taking dollars out of the financial system which will have an indirect effect on the exchange rate.. The acquired $AU can be used in its normal method of implementing monetary policy (Buying/selling gov. securities)
Hope this helps :)
Ahhhh so the taking AUD out of the world market is equivalent to taking money out of the financial system (is that just an assumption for high-school economics or does it hold true in real world as well?) That makes much more sense - was just confused about what is counted as the financial system :) Thanks!!
What are the strutural and cyclical issues of Australia's economy? Would structural refer to low national savings, high CAD and narrow export base and cyclical issues be ?
The issues you named are definitely structural issues. Structural issues are generally ones that have been long term problems with the economy. I would probably also add that environmental issues, inequality and high wages also fall under this category. Generally, lots of structural issues contribute to the behavior of economic growth and the business cycle. Anything to do with the business cycle is generally cyclical issues. This includes the associated higher unemployment rate due to higher economic downturn etc. I would also argue that lots of structural issues combined contribute to cyclical issues faced in society.
Hope this helps :)
Ah yeah, thats what i assumed for cyclical i just couldnt think of any"big ones" like high CAD etc,
also for fiscal policy how can we check what has been implemented from budgets ?
Hey,
Just wanted to know whether is acceptable to use headings/titles (somewhat report style) for section 3 and 4?
Or does it have to be essay style
Thanks
I don't think Bostes out-rightly states that it must be in essay form though it is what most students write. The marking guidelines for these sections in the band 6 range is just:
-Synthesises own knowledge and understanding with the information provided, to develop a sustained, logical and cohesive response
-Integrates relevant economic terms, concepts, relationships and theories
-Demonstrates a clear and comprehensive understanding
So I would argue that you can use subheadings within the writing. It really is dependent on your writing style. The most important thing about essays is just making sure that it is structured and that the analysis is logical and clear.
Hope this helps
For 2012 subsidy question how do we read the graph. For 2011, how is c the answer?
For the subsidy question, the answer is A. But brontem, for the 2011 question haven't the terms of trade improved?
For the subsidy question, the answer is A. But brontem, for the 2011 question haven't the terms of trade improved?
I calculated the terms of trade by export price index/import price indexahh my bad. I thought year 1 had 100/100. You are very much correct
Year 1 110/100 * 100 = 110
Year 2 105/100 * 100 = 105
So it deteriorated from 110 to 105
That's how I got the answer, unless it's done another way??
Just wondering, would knowing policy responses to economic issues be enough for knowing budgets or should i have knowledge of budgets that had relate to globalisation ( not sure if this question makes sense )
Thanks
Just wondering, would knowing policy responses to economic issues be enough for knowing budgets or should i have knowledge of budgets that had relate to globalisation ( not sure if this question makes sense )
Thanks
Thanks Birdwing, yeah that makes sense to me. Also, was wondering how much of the topic 4 microeconomic reform stuff do we need to know - NCP, Deregulation, Regulation, Product/Factor Markets, Labour market reforms etc because im just looking at it right now and im dreading going over this
Thanks Birdwing, yeah that makes sense to me. Also, was wondering how much of the topic 4 microeconomic reform stuff do we need to know - NCP, Deregulation, Regulation, Product/Factor Markets, Labour market reforms etc because im just looking at it right now and im dreading going over this
2015 was a microeconomic reform essay, so it remains unlikely that there'll be an essay on this stuff. However, it's quite likely you'll come across it in the short answer section of the paper, so I would focus your knowledge of NCP, Deregulation, Regulation, product/factor markets to addressing those questions. Labour market is slightly different, and is more likely to be asked as an essay question although it is still quite unlikely that it will.
But if you can study it, it's in your best interests to do it :) Maybe look at the textbook and do the short answers at the end of this section as practice :)
http://www.acehsc.net/wp-content/uploads/Trial%20Papers%202015/2015/Economies/2015%20Economics%20-%20QATS%20Trial%20with%20Solutions.pdf
Can someone tell me if these multiple choice question solutions are wrong ?
If we are given a subsidy diagram how would we find the total cost of the subsidy, e.g subsidy amount * X ( how do we know how much is being subsidised )
In a subsidy graph (Like the one attached), the supply is shifted to the right from S to S1 as domestic supply increases. This is due to the nature of subsidies whereby it's payments by the government to make an industry more competitive and productive. Thus, increasing supply and lowering the market price. The area of the box in the attachment would be the size of the subsidy.
Hope this helps :)
Hey Deng,
I'm pretty sure they are wrong.. Unless I really need to revise every section ;)
Some of the answers didn't seem right at all, what did you get for 12 - I didn't think any of them were correct.
The short answer guidelines are ok though :)
Hey Deng,
I'm pretty sure they are wrong.. Unless I really need to revise every section ;)
Some of the answers didn't seem right at all, what did you get for 12 - I didn't think any of them were correct.
The short answer guidelines are ok though :)
Hey Deng,
I'm pretty sure they are wrong.. Unless I really need to revise every section ;)
Some of the answers didn't seem right at all, what did you get for 12 - I didn't think any of them were correct.
The short answer guidelines are ok though :)
My bad, i dont think i explained myself properly, say for example i knew the price of the subsidy was $5, but it asked me to find the total cost of this to the government i.e what is the quantiative amount of goods being subsidised. So on the graph, it would be 5* Q but im not sure how to find Q. I would post the question but i managed to lose it :/
I agree- I had completely different answers:
1. C
2. A
3. C
4. D
5. A
6. D
7. A
8. B
9. A
10. D
11. A
12. I feel like 12 is asking for marginal propensity to save because I got 0.8 for MPC
13. C
14.D
15.B
16.C
17.A
18.B
19.C
20.A
These are the answers I got for MC. I could be wrong though so please message if you find a wrong answer.
Um okay, from memory the question was asking how much the total subsidy would be costing the government overall. For example if quanity was 400 and subsidy was 2$ then it would cost the government 800$ however for the question i had to work out the quantity except im not how to work it out looking at a grap
For question 9 - could you please explain it to me?
I got B, increase in consumer confidence, because to if consumer confidence increased then people would buy more hence increasing consumption and the marginal propensity to consume. When the MPC increases, the value of the multiplier increases, right?
I didn't think it was A because an increase in investment would only have a multiplied effect, not increase the multiplier itself; unless investment was used to become more efficient and decrease prices, and thus encourage consumption.
I agree- I had completely different answers:
1. C
2. A
3. C
4. D
5. A
6. D
7. A
8. B
9. A
10. D
11. A
12. I feel like 12 is asking for marginal propensity to save because I got 0.8 for MPC
13. C
14.D
15.B
16.C
17.A
18.B
19.C
20.A
These are the answers I got for MC. I could be wrong though so please message if you find a wrong answer.
Just wondering how are people remembering stats and trends etc because ive been trying since friday and they arent sticking for me :/
Just wondering how are people remembering stats and trends etc because ive been trying since friday and they arent sticking for me :/Yep that is what I'll be doing. For me to remember the trends, I try to analyse them by writing mock-up essays. I feel like once I can analyse, I can understand and thus remember and be able to morph if need be during the exam.
Hey for 5 I had D, because an increase in early retirement reduces the size of the labour force and since unemployment rate is calculated by number of unemployed persons/labour force, a decrease in labour force will increase unemployment. And its short term because the jobs previously filled by retirees will need time to be replaced? Was just wondering whether my approach is completely wrong and im overthinking it hahaha, can you explain how the answer is A? Thanks! :)
Hi there,
I'm a bit confused as to what the " overall positive correlation between CPI, Earnings and Cash Rate (besides
during GFC) " is - when explaining the effects of inflation. This was in the suggested answers for 2014 extended response question 26.
Can someone please give me a hand?
Hiii,
Is it possible for you guys to check out 2009 HSC Economics question 7 (multiple choice), and explain how it works?
It has a tables so i didn't type it down.
Thanks in advance!
I think what it's trying to get at, is that in general, as CPI increases, so do average earnings (as it is during a period of economic growth). During this time the government will also desire to use counter-cyclical policy to smooth out the trends in the business cycle, and in order to maintain a set level of inflation, as CPI increases, cash rate also increases.
Does that seem right?
If there is a change in a specific tax bracket, let's say the marginal tax rate increases for the highest bracket of income earners, is this considered a discretionary fiscal policy, or a micro economic reform (tax reform).
Thanks
Oh, that does make sense, although is that a "positive correlation" not sure what it means by positive...
If there is a change in a specific tax bracket, let's say the marginal tax rate increases for the highest bracket of income earners, is this considered a discretionary fiscal policy, or a micro economic reform (tax reform).
Thanks
Is the total size of the subsidy paid by the government the vertical distance between the supply curves times by the 2nd equilibrium point, or the 1st equilibrium point?
Can anyone give me a list of graphs that i should include in my essays and just know in general??
THANKS :)
So its the price per unit times by the NEW QUANTITY which they produce on the x-axis yeah? Cause this question lol... no answers btw
So its the price per unit times by the NEW QUANTITY which they produce on the x-axis yeah? Cause this question lol... no answers btw
Aaaaah this question - had a sustained discussion with mates in my year about it :) Isaac is right when the answer is A - $500, but I personally believe that the question makes little sense, because technically you have to assume that the government has imposed a $2 tariff, because otherwise the economy would be operating at the world price of $5. In this case (the $7 becomes a $5), the quantity increase is the same, just a different size of subsidy.
Hey guys,
Will there be a guide for 24 hours til the HSC Economics exam??
I am kind of struggling to get through the content and need a bit of direction as I am unsure what is the best way to go about studying for it - statistics, articles, notes, RBA charts, past papers, essay plans???
Any help is appreciated :)
OMG wow, good pick up birdwing, I didn't even read the first bit, lol that is soo weird, how can the price be $7 if the world price is $5... It doesn't tell us what the quantity is at $5
hey can anyone help explain how borrowing from private sector leads to the " crowding out " effect? im abit confused... THANKS
Hi there,
What is your preferred structure for an essay?
How do you also structure your paragraphs and use reading/planning time?
Also, if a question is two parts, or double barrel - do you integrate the two parts or deal with them separately (e.g. explain recent changes in the level of unemployment and the effect on unemployment)
Thank you :)
In reading time, I always turned to the essays first and figure out which essay I am going to do and process the stimulus questions. Those were the ones that I needed more time on to think about. I don't immediately plan, I just define the topics (e.g in the question you gave I would go unemployment is number of people supplying labor but are underutilized by labour market). Then I move onto the short answer and see if any stump me before finally moving on to MC. This way it gives me more time to ponder potential economic concepts I can include in the question and see if there are any other extra info given in the MC which I had not thought about.
Unfortunately my weakest part of my game was MC so I would spend double the amount of time on it before flying through SA and the essay. How you attack the time is dependent on your weaknesses. Generally try to keep to the recommended times BOSTES gives you
In essays, I would structure it with economic concept -> policy to combat -> why that policy work/didnt work-> further suggestions if need improving. In 2 barrel questions, one always relates to the other so do it together( another reason why econ. is integrated and you can't tell prelim from hsc). In your question the level and changes of unemployment rates ->will be impacted by types of unemployment -> impact economic growth -> effects of unemployment etc. So I usually do it together. In your question i would structure it economic concept (rates of changes in unemployment rate e.g hidden unemployment increasing) -> Impact to unemployment rate -> policy to combat. (pardon all the flow charts its just how I explain how my brain works when I write)
Before I write I'd scribble down all the concepts that relate to the question beforehand and then each paragraph tackles that one point.
e.g in your question:
-cyclical unemployment (Business cycle)
-hidden unemployment (Falling participation rates)
-underemployment and casulisation of the workforce (increasing part-time jobs)
-Structural unemployment (Manufacturing)
-Infrastructure; boost of foreign investment due to globalization funding -> comparative advantage-> job creation lower growth
This would see me through the essay pretty much and makes the writing flow better I found
Hope this helps :)
Thank you!!
This is very helpful :)
With the essay, would you have an example or statistic in each paragraph? I have tried to get as many stats to cover all aspects of the syllabus, hence why my trends are 17 pages long as I thought I had to have some sort of trend in each paragraph (i.e. cyclical unemployment 1st paragraph, structural 2nd, long-term 3rd...)
Also, what are the positive and negative effects of both low and high inflation - I can't think of more than one for some of them...
And also, when it says Analyse the effects of protection policies on the Australian economy - does this mean protectionist policies of o/s trading partners on the Australian economy, or of Australian protection on our economy??
Sorry for the spam of questions!!!
Thank you!!
This is very helpful :)
With the essay, would you have an example or statistic in each paragraph? I have tried to get as many stats to cover all aspects of the syllabus, hence why my trends are 17 pages long as I thought I had to have some sort of trend in each paragraph (i.e. cyclical unemployment 1st paragraph, structural 2nd, long-term 3rd...)
In reference to the crowding out effect, how would you talk about it in an essay? In the sense that due to the deregulation of global financial markets, the government can borrow from overseas markets and consumers can also use overseas financial market
And also, when it says Analyse the effects of protection policies on the Australian economy - does this mean protectionist policies of o/s trading partners on the Australian economy, or of Australian protection on our economy??
Also, what are the positive and negative effects of both low and high inflation - I can't think of more than one for some of them...
What would be the mininal statistics we would need to know for economics exam e.g inflation/unemployment/cash rate/EG/ avg cad/ part rat etc
What would the higest mark be in an essay with minimal stats or trends ? Because i feel i might get a question i wont have stats for and i have to juggle my legal stuff which is causing me headaches
Is the 2016-17 Budget contractionary or expansionary?
Because the 2015-16 Budget deficit was $29.8bn, and 2016-17 is forecasted a deficit of $37bn
Is the 2016-17 Budget contractionary or expansionary?
Because the 2015-16 Budget deficit was $29.8bn, and 2016-17 is forecasted a deficit of $37bn
Hi Magma
Is that information correct? I thought the 2015/16 budget deficit was closer to $37.4 b (http://www.abc.net.au/news/2015-12-15/budget-deficit-increased-as-myefo-released/7029472).
In any case, it is definitely expansionary as long as the budget is in deficit. The government right now is attempting to get us back to a surplus, hence the 'forecasts' that show declining figures over the next 5-6 years. So whilst it may seem like the deficit is declining, you must remember that G>T for a deficit budget and thus they are all expansionary.
Hope this helps!
How to do?
Hey there,
To work this out, we firstly need to find the Marginal Propensity to Consume - in this economy, we are assuming that there is no taxation; thus Income = Savings + Consumption
Hence the MPC = change in consumption / change in income
MPC = 4/5
We know that the multiplier (k) = 1/(1-MPC)
therefore k = 5/4
Since change in income = k x change in AD
A change in income of 1000 = 5/4 x change in AD
Therefore the change in AD = $800
I think your multiplier should be 5 (you accidentally calculated 1/MPC) but the method looks good :)
May haved asked this before, but i cant seem to find the old post but how would i find consumer consumption on a tariff diagram
Do you know the answer? Is it C?
Do you know the answer? Is it C?That's what I think the answer is as well
That's what I think the answer is as well
Do you know the answer? Is it C?
Can one of you please explain how it is C ?When the price is at $50, the demand is 700 units. Therefore 700 x 50 = 35 000
May haved asked this before, but i cant seem to find the old post but how would i find consumer consumption on a tariff diagram
When there is a rise in the minimum wage, there will be an increase in the supply of labour. This means that the participation rate has risen right?
High Inflation:
-Distort consumers' decisions to spend or save disposable income -> More likely not to spend therefore lower growth
-Employees seeks higher wages as propensity to spend decreases -> Wage price inflationary spiral (Higher wages tend to stay high -> higher prices and never ending cycle)
-Distribution of income -> Lower income will see their propensity to spend decrease at a more rapid rate than those with higher wages (More affected)
-Unemployment -> Direct link with NAIRU
-Increased price of our exports -> uncompetitive therefore less aggregate demand
-High inflation can cause exchange rates short term appreciation of $AU- speculation that RBA will raise cash rate in contraction of monetary policy leading to increased financial flows
(However in long term, sustained low inflation leads to greater confidence in Aus economy strengthening the dollar in the long term)
Then low inflation impacts are pretty much the opposite that of higher inflation
Hope this helps :) Sorry about staggering your questions I had a lot on my plate in the last 2 hours so I couldn't address all aspects of your question in one go.
Hey there, thank you soo much for answering my questions; don't worry about the staggering, not fussed at all. Altho what exactly are the benefits of inflation - most of those effects were negative,.
Also what are the causes of underemployment especially now since it is increasing???
Thank you :)
Hey guys!
Does anyone know if for the essay Q for your case study, if they can ask for all 3 components ; economic growth, environmental sustainability and economic development?
Could someone have a look at HSC Economics 2009 21a and explain how the table works.
Thanks!
May I ask why the answer to this question (HSC 2011 Paper - Question 17) is $2000? Thank you!
HEYYY
can anyone explain what happens to the australian dollar when you buy/sell foreign currency?? THANKSSS
HEYYY
can anyone explain what happens to the australian dollar when you buy/sell foreign currency?? THANKSSS
Hey,
Can someone please explain to me how micro economic reform creates dynamic efficiency?
thank you
Dynamic efficiency is generally the productivity of the firm overtime.
Now in macroeconomic reform we are interested in making our industries more competitive and efficient to develop comparative advantage. Therefore by making our industries more efficient and productive through infrastructure upgrades (technology) and improving processing methods, firms will be more efficient in the long term. (IE dynamic efficiency)
Dynamic efficiency is generally the productivity of the firm overtime.
Now in macroeconomic reform we are interested in making our industries more competitive and efficient to develop comparative advantage. Therefore by making our industries more efficient and productive through infrastructure upgrades (technology) and improving processing methods, firms will be more efficient in the long term. (IE dynamic efficiency)
Wait, I thought dynamic efficiency was the ability of an economy to adjust to changing economic circumstances and changing levels of demand.
Isn't technical efficiency the productivity and efficiency of the firm to maximise it's output with given level of input?
Hey,
Sorry hermansia, im still not quite sure how the two columns correlates with each other.
There's a similar type of question in 2010 multiple choice question 7. It'll be great if you could explain it again, if not that's ok!
Thanks
List of graphs we need to know for tmrw please
Hey,
Sorry hermansia, im still not quite sure how the two columns correlates with each other.
There's a similar type of question in 2010 multiple choice question 7. It'll be great if you could explain it again, if not that's ok!
Thanks
List of graphs we need to know for tmrw please
"Analyse the federal government's macroeconomic policy mix to address inflation and unemployment in the Australian economy"
Could i get some pointers on what they might do and the effects it will have?
Thanks
hi why is this A and not C
"Analyse the federal government's macroeconomic policy mix to address inflation and unemployment in the Australian economy"
Could i get some pointers on what they might do and the effects it will have?
Thanks
WOW. I literally had the 2009 year open and was looking at the exact question, I closed the tab and refreshed this atarnotes page and I see you post the same question. Wow...
"Analyse the federal government's macroeconomic policy mix to address inflation and unemployment in the Australian economy"
Could i get some pointers on what they might do and the effects it will have?
Thanks
Question is: Calculate the increase in domestic quantity produced after the subsidy.
I cannot fathom it :(
Effects of inflation on exchange rate?
Thanks
Effects of inflation on exchange rate?
Thanks
"3. Memorising statistics: Don’t memorise these the night before! These will become your downfall if you do cram. The trick to memorising statistics is reading/watching the news daily (weekly at the very least). When you’re watching the news, use the psychological trick by noting down key points and statistics as interesting. TRENDS ARE MORE IMPORTANT THAN SPECIFIC STATISTICS!!! Your data should always reflect the effects/impacts of policies and economic issues relevant to the question."
RIP
500 -> 600 so an increase in quantity of 100?
Hey guys in the exam there was a q asking about the disadvantages of international agreements, i wasnt sure what to write. Can anyone suggest answers? Thanks!!!
Hey guys in the exam there was a q asking about the disadvantages of international agreements, i wasnt sure what to write. Can anyone suggest answers? Thanks!!!
Hey guys in the exam there was a q asking about the disadvantages of international agreements, i wasnt sure what to write. Can anyone suggest answers? Thanks!!!
doing a case study on malaysia, would it be considered a developing, developed or emerging economy.
Simple question here:
'Compare and contrast international and regional business cycles' (3 lines given)
Yup although compare and contrast seems a little extravagant for 3 lines (lol) - would imagine that being at least a 2-3 marker. Anyway, given it's a one marker, I'd probably answer it in one sentence, something that follows on from below (hopefully a little better worded).
The international business cycle refers to the increase in coordination of and cooperation between economies across the globe, whereas the regional business cycle refers to the integration of local economies within the same geographical area.
Thanks for your reply,
FYI this question was from the 'Dotpoint Economics' WorkBook.
I must add though that in your answer i see that there was no comparison made. I am by no means experienced or great at answering questions but in an exam i'm guessing it'd be a 2 marker as you are both comparing and contrasting international and regional business cycles, but what would i know anyways... lol
Simple question here:
'Compare and contrast international and regional business cycles' (3 lines given)
Hi guys, just needed some clarification on a dotpoint in the syllabus about inflation(Topic 3: Economic Issues)
• positive and negative effects
Are the positive and negative effects of inflation talking about high/low inflation? I'm not sure if i make much sense here, I think what I mean is would positive effects of inflation be talking about low inflation while negative effects be talking about high inflation? If someone could provide another perspective(and maybe some points on positive effects of inflation?) that would be great, thank you!
Hey guys! I read the information that was posted in how to get a band 6, and it was mentioned that we should keep up to date with the news at a weekly minimum. Are there any phone/news apps that can be downloaded that give specific regular economic updates and notifications?
Hey guys! I read the information that was posted in how to get a band 6, and it was mentioned that we should keep up to date with the news at a weekly minimum. Are there any phone/news apps that can be downloaded that give specific regular economic updates and notifications?
Discuss and evaluate the effectiveness of the WTO in promoting global free trade.The effectiveness of the WTO is contingent on two things, firstly, what their impact and ability is in promoting free trade and secondly how free trade would work had the WTO not existed.
How would you answer this question? More specifically what would your evaluation be, and how would this defer for different organisations such as IMF, World Bank, etc.
Discuss and evaluate the effectiveness of the WTO in promoting global free trade.
How would you answer this question? More specifically what would your evaluation be, and how would this defer for different organisations such as IMF, World Bank, etc.
Hey guys,Did your school do topic 3 first? Or are you just ahead cos I don't think that is in the first two chapters?
Discuss the effects of economic growth on unemployment and inflation in Australia
For an essay question like this, how would you structure your essay? How many paragraphs does a 'good' economics essay have? Also, regarding the actual question, what actual content would be included in the essay? For example, would I just write about the effects of economic growth on unemployment and inflation or would I go more in-depth and actually say what the effects of unemployment and inflation are?
Thanks in advance!
Did your school do topic 3 first? Or are you just ahead cos I don't think that is in the first two chapters?
I had an economics essay and I got the mark back and wasn't too happy with it even tho I did a lot of study and preparation and worked really hard on it. Essays have always been my weak point in economics. I was wondering if anyone had any advice about how to improve my essay writing in economics. Because I am really struggling and considering dropping the subject if I can't improveFrom my experience (I think I'm pretty good at short answers/MC where it is about knowledge but not amazing at essay, got 17/20 in case study) you need to do 3 things: Answer the question, show connection to theory and use relevant statistics and make reference to trends rather than just dropping stats. Also, if worse comes to worst and you only get 2 16s or something in HSC, you can still quite easily get a 90 raw (tends to align ~95 exam) since MC and SA can be prepared for very accurately, if you study hard. Also, if you want to do well make sure you get essays reviewed BEFORE you write them as that can be the difference between a B6 and a B5, there are excellent resources here and I'm sure in your school/even your friends. I'm not going to lie, economics is not going to be one of those subjects that you can just walk in and sit the exam after reading your notes. You have to have elaborate knowledge of many things that are occurring in the world of economics around you. I recommend even making a book of notes and every week or so reading the finance section of a newspaper/watch the news and write notes on what is happening in the world.
From my experience (I think I'm pretty good at short answers/MC where it is about knowledge but not amazing at essay, got 17/20 in case study) you need to do 3 things: Answer the question, show connection to theory and use relevant statistics and make reference to trends rather than just dropping stats. Also, if worse comes to worst and you only get 2 16s or something in HSC, you can still quite easily get a 90 raw (tends to align ~95 exam) since MC and SA can be prepared for very accurately, if you study hard. Also, if you want to do well make sure you get essays reviewed BEFORE you write them as that can be the difference between a B6 and a B5, there are excellent resources here and I'm sure in your school/even your friends. I'm not going to lie, economics is not going to be one of those subjects that you can just walk in and sit the exam after reading your notes. You have to have elaborate knowledge of many things that are occurring in the world of economics around you. I recommend even making a book of notes and every week or so reading the finance section of a newspaper/watch the news and write notes on what is happening in the world.
Answering the question
This is usually what draws people down in essays in pretty much all subjects, if you want a B6 you HAVE to answer the q. Even if you have a 20/20 essay, if it is focused on the wrong thing, you will lose the criterion for being concise.
e.g Discuss the advantages of free trade and the role of international organisations and free trade agreements in promoting trade in the global economy.
From Isaac's compilation of q. Firstly, you have to look at the verb. Discuss which means provide reasons for and against. So when you plan, first you to have an intro and conclusion then think about what points for and against the adv free trade and the effect of international organisations in PROMOTING TRADE in the global economy will have. E.g Free trade allows goods and services to be bought for a cheaper price as foreign countries can produce goods more cheaply due to comparative adv. Although this is the case, it can also cause dumping which can ruin domestic competition in a nations markets. You must ALSO talk about the effect of free trade agreements (make sure to use examples like the EU, NAFTA and bilaterals like ANZCERTA). Although they provide a lot more trade for nations inside the agreement such as in the EU in which labour and goods and services are moved very freely, it also means that many nations are forced to apply tariffs against nations not in the agreement which are majorly developing nations and LDCs, and therefore lock them out of the global economy and trade. You must also do this for organisations such as WTO, IMF etc. Ie, The WTO has allowed for major increases in international trade growth as they have removed a lot of protectionist policies in the Uruguay round (if possible mention some). However, they have poor enforcement on their standards and have allowed countries to use dumping as an excuse for protectionist policies. Then you must have a conclusion. Make sure you don't ramble on unnecessary stuff and have a structure detailed in the intro i.e pros/cons of free trade then agreements then organisations.
show connection to theory
This is usually required in the criterion "uses appropriate economic terms" or smth. The key here is to take something that has occurred in real life and explain how it works using what you have learnt in the course. e.g use things like graphs of demand and supply, use terms like comparative advantage, CAD, ToT, use equations like C+I+G=Y etc. The example above is relatively easy here as free trade can easily be related to effects on economic growth etc.
use relevant statistics and make reference to trends rather than just dropping stats
Statistics are like the quotes of economics. If you don't have evidence then what does it matter what you say. Like quotes in economics, you can't just drop the quote and move on. You must do two things: reference a trend and explain the impact of the statistic. Firstly, quotes are no good on its own. What is the point in saying Australia's GDP is $1.34 trillion in 2015. Saying this has literally no meaning at all. Is this high or low? What is it compared to the rest of the world? In order to use the stat it could be better to compare it to 1980 then 2000. In 1980 it was close to $200 b and it 2000 it was close to $400 b. Although this doesn't take into account economic occurrences such as the GFC, it plants a much better way of explaining what is happening. To add to this, you can't just say a quote like "Australia's GDP was $1.34 t in 2015 compared to 200b in 1980". Instead, you have to talk about the effects of this and why this happened. You could relate it to increased globalisation and the removal of protectionist policies or changes in exports from Japan to the industrious and higher population China who have purchased "UGE" quantities of our exports. You should also reference the impact of increased GDP, are the people benefitting, is the government using wealth efficiently to improve economic development?
Hope this helps you improve, one mark isn't going to end you especially if you take it the right way and endeavour to improve :)
2 marker here: 'Distinguish between the financial flows of debt and equity'This would be easy for me to answer from my knowledge from accounting but I doubt that's what you'd want, so I asked a friend to see if there was anything worth mentioning. (Given that I did not do economics in the HSC myself.)
From what i understand, debt refers to the borrowing or lending of funds and equity involves ownership. Is it possible for anyone to expand on my current understanding?
Thanks
Not sure if HSC cover the AS/AD model (although I assume it does) but I have a few questions about long-run and short-run changes in equilibrium at the full employment level (first year university subject)
...
Any help would be fantastic!
This would be easy for me to answer from my knowledge from accounting but I doubt that's what you'd want, so I asked a friend to see if there was anything worth mentioning. (Given that I did not do economics in the HSC myself.)
You could contrast that:
Debt is subject to interest - when your financing is from a third party they'd want their funds back, so the longer you have the money on hand the more you have to pay in return
Gain/Loss in equity is only realised at the point of a transaction; you don't have it until the sale occurs.
Although, he didn't recall equity getting mentioned in HSC economics. For the sake of curiosity, mind pointing out which topic this is under?
Note: I'm well aware that I've probably only provided little information. Would much prefer a current/past HSC economics student to provide further insight.
AD/AS Model is just changes in aggregate demand and aggregate supply. Basically I'm asking about the effects of the events I listed above on either the Keynesian aggregate demand equation, AD=C+I+G+(X-M), where C=Consumption Spending, I=Investment Spending, G=Government Spending, (X-M)=net exports, where X=exports and M=imports and the Aggregate supply equation i.e. changes in nominal wages (cost of production) + import prices (cost of raw materials) and productivity (investment in new technology).
I just had a quick look at the HSC Economics Stage 6 syllabus and it says this sort of stuff is covered under the "Economic Issues in the Australian Economy' aspect of the course. However I'm not quite sure if you covered it in terms of changes in the curve of a graph with regard to short-run and long-run perspectives.
Whilst I'm here, I have another two questions which hopefully someone can help with;
1) Suppose that government would like to maximize tax revenue. Explain why it may be a good idea for the government to lower tax rates for the goods that have very high price elasticities of demand (exceeding one).
2) Suppose that government would like to maximize tax revenue. Explain why it may be a good idea for the government to raise tax rates for the goods that have very low price elasticities of demand (less than one).
Thank you :)
AD/AS Model is just changes in aggregate demand and aggregate supply. Basically I'm asking about the effects of the events I listed above on either the Keynesian aggregate demand equation, AD=C+I+G+(X-M), where C=Consumption Spending, I=Investment Spending, G=Government Spending, (X-M)=net exports, where X=exports and M=imports and the Aggregate supply equation i.e. changes in nominal wages (cost of production) + import prices (cost of raw materials) and productivity (investment in new technology).Briefly brushing up on my basics
I just had a quick look at the HSC Economics Stage 6 syllabus and it says this sort of stuff is covered under the "Economic Issues in the Australian Economy' aspect of the course. However I'm not quite sure if you covered it in terms of changes in the curve of a graph with regard to short-run and long-run perspectives.
Whilst I'm here, I have another two questions which hopefully someone can help with;
1) Suppose that government would like to maximize tax revenue. Explain why it may be a good idea for the government to lower tax rates for the goods that have very high price elasticities of demand (exceeding one).
2) Suppose that government would like to maximize tax revenue. Explain why it may be a good idea for the government to raise tax rates for the goods that have very low price elasticities of demand (less than one).
Thank you :)
Price elasticity of demand is a measure of responsiveness of the market's demand to a change in price. It is defined as "the percentage change in quantity demanded resulting from a very small percentage change in price". (Dobrescu, 2015) The formula isNow what's the deal with a tax?
Where P = Price of goods at a specific point, and Q = Quantity demanded at that point.
(This implies that depending on where you are on the curve, in general the elasticity changes.)
By consequence if the price were increased whilst the demand was inelastic (not so responsive), the revenue for the producer would be increased. If the price were increased for an elastic demand (quite responsive), the revenue would be decreased.
Can somebody please explain the balance of payments? Thank you x
Hey CiaraO,
The Balance of Payments is a record of the financial transactions between Australia and the rest of the word over a given period.
It basically shows money that flows out of Australia i.e. debits (through purchase of imports, non reversible transactions such as sending dividend profits to overseas shareholders, loans taken out by people overseas) as well as money that flows in to Australia i.e. credits (o/s buying our exports, Australian's receiving loans from overseas banks etc.)
That is the general gist of the balance of payments, feel free to ask any further questions. I know this topic gets quite tricky and confusing, so we are all happy to help :)
Explain the causes of recent trends in the distribution of income and wealth in Australia
can anyone please help outline what i should be aiming to write for this essay question, i have no idea where to even start
Examine the effects of changes in trade and financial flows on Australia’s economic performance
I would appreciate a few pointers on what I could write about for this essay, I'm very lost atm :(
Hey guys
On this list here: https://atarnotes.com/forum/index.php?topic=166305.msg934197#new which essay questions require you to know your stats and which dont?
A good idea is to look at the syllabus and find the relevant dot point the essay is trying to refer to.
In this case, it is under "trends in Value, composition and direction of Australia’s trade and financial flows
- trends in Australia’s trade pattern
- trends in financial flows – debt and equity"
There should be information on it if you check out the textbooks :)
Then you need to link it to "Australia's economic performance", which broadly speaking includes Australia's trades (exports/imports), financial flows, exchange rate, eco growth, unemployment, inflation rate, external stability and *maybe* distribution of income and wealth/environment.
This is a curveball essay - that part of the syllabus is rarely tested and probably won't be asked again but hopefully that gives an idea of what to write :)
Also, make sure you explain clearly the causative effects since this question asks you to "examine".
e.g.
floating of exchange rate in 1970s -> opened Australia's financial markets by shifting finance easier. Allowed FDI to double by 1980s. Then talk about how increased investment led to:
- increased eco growth (AD = C + G + I + X - M)
- increased employment
- inflation
- comment on borrowing/overseas loans
- explain how it changed exchange rates
etc
You should also focus on BOTH trade and financial flows so try to balance it out.
Oh just to sum it up - in case you're still struggling, the relevant information includes (but not limited to)
- directions of trade (UK -> Japan -> ASEAN etc)
- composition of trade (export less agriculture more minerals; in the future more services). Could comment on changing employment (e.g. less farmers, more people in the mining industry). I think Dutch Disease could be relevant (read more of it from Dixon's textbook)
- technology changes, floating of exchange rates, dereg of financial markets, increase in TNCs, globalisation - these all increased financial flows
Hey, was wondering if someone could explain monetary policy (as simply as can be said), ever since preliminary I've been totally confused with this ???
Is making notes suggested or is understanding the textbook enough in studying for an exam?
Tips on extended responses, particularly in regards to structure?
Hi, how would I calculate this:
the answer is B btw.
Hey, so in doing research for recent trends of balance of payments, the current account deficit has been at its lowest ($-3.9bn) since 2001. How does this work in conjunction with the recent fallings of commodity prices? Don't they contradict each other? I want to use recent stats in my long responses, but I can't seem to make this fit.
What are the effects of a depreciation/appreciation on the Australian government?
Hi, so I have to write an essay on protection's effect on economic development and growth, but I'm not sure what the most effective way to structure it would be. I was thinking of structuring based on methods of protection and discussing its effects, but I'm a bit skeptical. Anybody know what the most effective structure would be?
Thanks in advance. :D
I have been given four possible essay questions for the upcoming mid-course (Two of which, the teacher selects for the actual exam). How would you suggest remembering all four?
How exactly do you calculate this?
Is making notes suggested or is understanding the textbook enough in studying for an exam?
How exactly do you calculate this?
Hey!!
Help with this would be great..
Explain the impact of higher interest rates on the Aus economy.
I've already got
- increased foreign investment in Aus
- decreased import expenditure as people's loans become more expensive
- more domestic saving
- appreciation of the $AU
Anything else to add?
Hi!
Can anyone explain to me what service costs are and why, when there is a high level of KAFA surpluses, the CAD will widen because of these service costs?
Hi,
What is the difference between the net secondary income in the current account and the capital transfers in the capital account?
How does expectations of increases in US interest rates affect Australian exchange rates and balance of payments?
Hi,
Was just wandering, is there a diagram for a revaluation of the $A?
Does anyone know an easier-ish way to remember whether factors cause the AUD to appreciate/depreciate?
Thanks!
Hi,
What is the difference between the net secondary income in the current account and the capital transfers in the capital account?
HI,
Just had a question ? what factors determine the appreciation and depreciation of the exchange rate?
thanks
Could you please explain Okun law
thank you
Hey could someone help:
(https://www.upload.ee/image/7060764/Screen_Shot_2017-05-29_at_6.27.55_pm.png)
(https://www.upload.ee/image/7060759/Screen_Shot_2017-05-29_at_6.32.05_pm.png)
HI! for "impacts of microeconomic policies on structural change in the Australian economy", would you know of any recent microeconomic policies I could talk about??
Thanks :)
Could you please explain Okun law
thank you
HI! for "impacts of microeconomic policies on structural change in the Australian economy", would you know of any recent microeconomic policies I could talk about??
Thanks :)
The current budget's fiscal stance is contractionary. I'm confused, because the federal expenditure exceeds that of last year. Anyone care to explain this?
How would you answer this question? Thank you!Hope this clears things up!!! good luck for trials
Describe and explain the trends in Australia’ economic growth over the past 5 years (6 marks)
Hi can someone help me with this question?
Evaluate the Australian government policies in addressing three economic issues to achieve the economic objectives
I already have three issues: Eco growth, unemployment and inflation but i don't know what to do after. Kinda confused. Please help! Thank You!!
Hey! Could you please explain the difference between the fiscal outcome and the underlying cash outcome?
Hey, I was wondering if you could please explain how to answer this - not sure if its actually tricky or if I'm just looking at it wrong:
A decrease in consumption expenditure of $400 million causes a fall in the level of national income.
If the current level of national income is $3000 million and the marginal propensity to save is 0.4, what is the new level of national income?
Thankss :D
Hi! Do you have the original consumption expenditure?I wish :( Haha that was the question word for word. I'm not sure if it really helps, but here were the options:
I wish :( Haha that was the question word for word. I'm not sure if it really helps, but here were the options:
The new level of national income is: A) $2600 million, B) $2333 million C) $2000 million D) $1000 million
Hey guys,
I was trying to do a HSC essay question; 'Discuss the impact of changes in the domestic and global economy on Australia's exchange rate.', and while I have the economic theory down, I have no idea what statistics or examples to use??? Any pointers to some good stats relevant would be appreciated.
1. Explain how interest rates are determined in Australia with reference to domestic market operations, exchange settlement accounts and the cash rate.
2. Describe what action the RBA takes to tighten and loosen monetary policy.
3. Identify the impact of the following transactions on the supply of funds in the short-term money market and their impact on the cash rate.
a) The RB buys Commonwealth Government Securities from a bank.
b) The RB sells Commonwealth Government Securites to a financial Institution.
Peace.
I am just a bit confused on this question: Distinguish between a fixed and a managed exchange rate.
Is "managed" referring to the flexible peg, or how the RBA manages the AUD by dirtying the float?
Thanks
Hi,
Could someone help me with this essay question please? "Assess the effectiveness of domestic and global policy to achieve environmental sustainability"
Could you go through what I should write for each paragraphs please?
Thankyou
When the RBA sells/buys second hand government securities, what effect will it have on the supply of money and hence the cash rate?
What is the most sustainable economic argument for implementing artificial barriers to trade?
A) To protect domestic employment
B) To raise government revenue
C) To discourage dumping
D) To achieve self-sufficiency
Answer: C
Could you please explain the answers for these multiple choice questions?
Which of the following is the best measure of external stability?
A) CAD
B) Net foreign debt as a % of GDP
C) Net public debt as a % of GDP
D) Net foreign liabilities
Answer: B (I don't understand why A and D are incorrect)
Which of the following is most likely to add to Australia’s Capital and Financial Account surplus?
A) An increase in royalties paid to Australia
B) An increase in Australia’s foreign aid program for international emergencies
C) An increase in loans borrowed by Australian banks from foreign lenders
D) An increase in money transferred to relatives overseas by migrants to Australia
Answer: C (Why is A incorrect?)
Which of the following policy changes would likely improve the allocative efficiency of an economy?
A) Decrease in the tax-free threshold
B) A decrease in agricultural subsidies
C) An increase in the minimum wage for hospitality workers
D) A decrease in the size of an import quota on a consumer good
Answer: B (Why is C incorrect)
hiNo graph as far as I know adds marks without appropriate justiification.
I was wondering which graphs would you guys recommend memorizing for the extended response? obviously different questions are suited to different graphs, but which types of graphs would be applicable for most responses and actually add marks to your response?
I'm doing my Prelim Eco exam tomorrow and I have 2 extended response questions...
I was wondering how could I prepare for an extended? And could someone possibility give my tips to writing an Eco extended repsonse under timed exam conditions and what is required?
Hi,
I'm always confused about conditional vs. non conditional foreign aid and where it's recorded in the balance of payments; I think conditional is in capital whereas non conditional is in net secondary, but in a question how do I tell whether the aid is conditional or not? e.g. a multichoice I'm doing rn is "Australia provides foreign aid to build schools in a developing country. This will be entered in Australia's BOP as a: (the correct answer is debit in capial).
Hi, could someone please help explain why the answer is B? I thought with less of those who would be categorized as unemployed in labour force, unemployment rate would decreaseif less people are actively looking for work -> labour force would be smaller
(https://i.imgur.com/6CERuf3.png)
if less people are actively looking for work -> labour force would be smaller
therefore looking at the unemplyment rate formula:
(no of unemploed people/labour force)
the labour force would decrease and no of unemployed would increase resulting in a higher unemployment rate
therefore it's B :)
Hey guys! Can I please have some help with this question? I don't really understand the working out/ reasoning. Thanks! :)
Hi,
What type of aid would fall under secondary income and what type of aid would fall under the Capital and Financial income?
Cheers?
Hey, was just wondering what the general process was with these questions? we never did it in classHi!
Hi!
Hope this helps
(http://uploads.tapatalk-cdn.com/20171025/3afde0c7e180b52728162489e838e2c7.jpg)
Referring to the photo, would the size of the quota be 2000 or do you have to do 2000-1000 so that it's 1000?
Hi!
The quota would be 4000-2000, which is 2000 :)
Omg that's completely different to what I thought, can you explain how?
Hi!Background InfoA quota is defined as a restriction on the amount/value of a good that may be imported.
The amount of imports is the difference between the quantity that domestic businesses can supply, and the quantity that is demanded.
So before the quota was implemented, the quantity that domestic producers supplied was 1000, whereas the quantity demanded was 5000. The amount of imports is 5000-1000 = 4000.
At the new price of $12, the quantity that domestic producers supplied is 2000, whereas the quantity demanded is 4000. The amount of imports is 4000-2000 = 2000.
At the old price, overseas producers could supply 4000, but at the new price, overseas producers can only supply 2000. Therefore, the quota is 2000 (maximum value they could supply).
Hope this makes sense!
Aw thankyou, you're incredible! That was ridiculously helpful, thanks again for such a comprehensive answer :)
Hey guys does anyone know why the answer is clothing and not food?This is because if you look at the picture.
This is because if you look at the picture.
Even though Food has a higher weighting factor then Clothing.
The Clothing has an increase of 20 compared to Food of 10 to the CPI by expenditure group.
The question is asking for which CPI expenditure group contributes the most to the inflation rate.
Hey guys does anyone know why the answer is clothing and not food?
Yo can anyone shoot me a link to some notes on external stability?
Hi! Could someone please help me with this question? Also what topic is it in?
Yo can someone please explain these for me. Thankyou
Yo can someone please explain these for me. Thankyou
Could someone help me with this type of question: Analyse the monetary policy stance adopted by the RBA during 2017. Using two monetary policy transmission mechanisms or channels, explain how this stance is likely ot have impact on the goals of strong and sustainable growth and full employment. (6 marks) I believe the monetary policy stance has remained the same throughout 2017, have I got that correct?
I am also kind of confused how to incorporate teh transmission channels into the answer.....?
Could someone help me with this type of question: Analyse the monetary policy stance adopted by the RBA during 2017. Using two monetary policy transmission mechanisms or channels, explain how this stance is likely ot have impact on the goals of strong and sustainable growth and full employment. (6 marks) I believe the monetary policy stance has remained the same throughout 2017, have I got that correct?Disclaimer: I did VCE Economics so the transmission channels may differ slightly or completely.
I am also kind of confused how to incorporate teh transmission channels into the answer.....?
I would talk about how the RBA have maintained the stance of level interest rates as they are in a tough position with low inflation, unacceptable unemployment and record low wages growth, yet they can't adopt expansionary monetary policy due to the property market that needs suppressing, and huge pressures from the US with their contractionary monetary policy (alongside the high AUD for a large part of this year)
I hope this helps. I would also include statistics to back up your answer too.
Hey, can someone explain this answer (D) to me please?
Thanks ~ :)
Hi,
Just wondering what the effect of monetary policy is on the exchange rate? Does loosening/tightening affect demand, supply, or both at the same time?
Thanks ! :)
So monetary policy controls the cash rate, which subsequently controls the general level of interest rates in the economy. This influences the demand for an economy's currency. So, if contractionary monetary policy is employed in Australia to increase the cash rate, interest rates will increase. Relative to the interest rates in other countries, this increase in interest rates means that foreign investors would receive a greater return on their investments in Australia because of the greater interest repayments, hence they would want to do this and hence must be Australian Dollars to invest in Australia. So, the demand for Australian dollars increase, which causes an appreciation of the Australian Dollar- you can show this on an AD/AS graph for Australian dollars :)
Thanks so much! So supply wouldn't be affected by the decreased interest rate - just demand would be?
Well, when demand for Aus dollars increases, supply also decreases. If you draw a Supply/Demand graph for Aus dollars, you can see this :)
Hi,
I get the concept but when you say increase and decrease, do you mean movement along the curve or an actual shift of the curve?
Thanks :)
Hi, does anyone know whether fiscal or monetary policy have a shorter time lag? I think fiscal has a longer time lag for implementation, whereas monetary has a longer time lag for the effect after implementation to take place. but in 2014 q24 "explain the limitations of both fiscal and monetary policy in addressing economic slowdown", the sample answer seems to assume time lag means time lag for implementation... (so does time lag automatically mean time lag for implementation?)
This is probably a dumb question but in this sentence:I don't know what the exact terms mean, but I think it's just a convoluted way of saying that lowering the cash rate affects (lowers) interest rates (via the transmission mechanism), resulting in a lower cost of borrowing (due to less interest needing to be repaid on loans)
"Monetary policy can also be used. Lowering the cash rate can affect the term structure of interest rates across the economy, reducing the cost of credit."
what does "term structure" and "cost of credit" mean?
Thanks in advance! :)
Hey guys, anyone have any HSC question predictions?
art of smart has a list of hsc question predictions: https://www.artofsmart.com.au/hsc-economics-2017-trial-exam-questions/
I think there'll probably be something on the case studies since it hasn't been an essay question for a while
Are reserve requirements set by the government or the RBA, or some other regulatory body? (maybe APRA?)
From my understanding reserve requirements are restrictions and guidelines that must be met for deposits and loans by financial institutions and consumers.
e.g. the decreasing maximum LVRs for home loans for particular suburbs in Sydney and Melbourne.
Thanks
Hi, does anyone have info on china and the international business cycle? I know they implemented a stimulus package as a response to the gfc, but idk where to find info on the effects of the package
Hi, does anyone know whether fiscal or monetary policy have a shorter time lag? I think fiscal has a longer time lag for implementation, whereas monetary has a longer time lag for the effect after implementation to take place. but in 2014 q24 "explain the limitations of both fiscal and monetary policy in addressing economic slowdown", the sample answer seems to assume time lag means time lag for implementation... (so does time lag automatically mean time lag for implementation?)
This is probably a dumb question but in this sentence:
"Monetary policy can also be used. Lowering the cash rate can affect the term structure of interest rates across the economy, reducing the cost of credit."
what does "term structure" and "cost of credit" mean?
Thanks in advance! :)
Can someone please answer this question
Assess the effectiveness of government policy in Australia in attempting to improve the BOGS in recent times?
Thanks!
"Analyse the impact of changes in the global economy on Australia’s Balance of Payments. In
your response, you should refer to the economic information provided. "
Hello, so in questions where it asks for "changes in the global economy" what sort of things can we talk about, im confused and stumped because it is so broad
Hey guys! Can someone please explain why the economy's international competitiveness had decreased in this Q? Because shouldn't a deteriorated ToT mean that the eco's imports are cheaper to buy and thus more competitive?
Thanks! :)
Edit: How would i go about structuring a response to the essay question "Analyse effects of domestic and global free trade and protection on the Australian economy" (2013 HSC)
Hey guys can someone please explain why C is the correct answer? It doesn't make any sense to me.Globalisation is the increasing interaction of people through the growth of the international flow of money, ideas and culture.
Thanks! :)
Hi, can someone please explain the difference between product and factor markets, as well as which microeconomic reforms correspond to which markets? Also could I please have some help with this question? thanks!
(https://i.imgur.com/vsANW2L.png)
Also, if someone could please explain Question 20, I'd really appreciate it :)
Answer is C
The answer here is D. I understand why it is correct, but why is it MORE correct than A?
I get that employers are less likely to higher a youth cos they have to get paid more, and more likely to pay an adult if they are paid relatively less but couldn't you look at it from the perspective of adults being more willing to get a job (more incentivised to get a job, more productive, willing to work more hours etc.) as they are getting paid relatively more - from A?
So given more adults are willing to work, they take more jobs, and increase unemployment of youth?
Hi,
can someone help me with this question?
In a hypothetical economy, MPC = 0.9. What is the change in national income if investment declines by $100 million? so the answer is $1Billion but i don't get how??
TIA
Hi,
can someone help me with this question?
In a hypothetical economy, MPC = 0.9. What is the change in national income if investment declines by $100 million? so the answer is $1Billion but i don't get how??
TIA
2008 HSC Economics, Question 7
How can aggregate demand decrease unemployment if the economy is at NAIRU (where there is zero cyclical unemployment)?
Hey there,
So economic growth in the short to medium term is driven by changes in Aggregate Demand. So if aggregate demand increases; it will increase short term economic growth. Also since aggregate demand is the total demand for goods and services produced in the economy; if that increases then it means the demand for goods and services is increasing. When this happens; firms need to increase production to satisfy this demand. Thus they will need to hire more workers to increase production; therefore decreasing unemployment. --> so basically increased AD = increased growth = decreased cyclical unemployment
Good luck for tomorrow!!!
Isaac :D
Thanks! But at NAIRU isn't there no cyclical unemployment? So how would increased economic growth decrease unemployment below this rate if there are no cyclically unemployed people in the economy?
Are market and non-market based policies to the environment (e.g. tax, subsidies, embargoes, targets, regulations) a part of fiscal policy or are they microeconomic policies?
Hey,
So for my case study, one of the questions was the 'Examine the impact of globalisation on the economic performance of the chosen country' (India)'. I was thinking of linking trade liberalisation as one of the drivers of economic growth. However, I'm struggling to link or find relevant stats to help back up that trade liberalisation has increased economic growth in India. Are there any suggestions of how to approach this question?
Thanks and much greatly appreciated :)
Hello!
I was wondering if anyone could help me understand why CAD + KAFAS has to equal zero - or in other words why the amount made in the KAFA has to equal to the exact amount (give or take stat errors) in the CA? I understand that there are links between the two account and that a credit in say investment leads to a debit in the NPI section of the current account, but I’m not sure why one account must be exactly the negative of the other. For example, what if we made 10 billion in investments but lost only 7 billion in the NPI (including returns on investment, labour payouts etc), resulting in the CAD being maybe only -30 while the KAFAS is +60?
I’ve also seen these equations in many textbooks:
Supply of $A = Demand for $A
M + Y debits + K outflow = X + Y credits + K inflow
M - X + Y debits - Y credits = K inflow - K outflow
I’m not really sure what these mean or how these are derived. If anyone could explain my two very long (sorry!) questions I would be really grateful.
Thank you! :)
Is there more foreign and business confidence in an economy that has a current account deficit or surplus?
Hiii!!I think the question is just asking you to discuss what impacts the patterns of trade and financial flows. So if I were you, I'd probably address fluctuations in exchange rate and how this affects the CAD - depending on which avenue you pursue, this could either discourage or encourage foreign investment in the economy. For example, you could say financial inflows will continue rising if foreigners expect the currency to continue appreciating as they will benefit from higher return in terms of the foreign currency. Maybe you could even make a link to the resources boom. And yes, you could definitely discuss dutch disease, as long as you make relevant links back to the question. Also, the shift of economies from developing to emerging - particularly in the Asian region - has increased the amount of imports into our country as they are able to produce goods at a price lower than what is available to consumers domestically. In China for example, the shift from a socialist economy to a market economy has enabled rapid economic growth, which has not only benefitted the country itself, but also Australia. In addition, there has been more and more trade liberalisation in these countries due to closer economic and political ties which has thus increased trade flows into Australia - so essentially, globalisation. I think this is much more pertinent to the topic of trade compositions, so ensure this is mentioned somewhere in your response. I could literally think of an infinitude of ways you could go about addressing this question. You could also mention Australia's status as a net capital importer and how this has allowed to become dependent on foreign capital to supplement our shortage in domestic savings, which in short, increases both direct and portfolio investment blablablah.. HAHA this was just lowkey a braindump, but hope it helped somewhat AHH
Could someone please help me understanding what this question is asking of me? "Analyse the influence of different factors on Australia’s trade and financial flows"
i.e. one of the suggested answers include "composition of Australian trade" so would i talk about how the composition has changed (dutch disease? etc) but then how would I go about analysing the influence of different factors on Aus' trade and financial flows? (Essentially I don't understand what the question is)
what are causes of appreciation and depreciation
Heyy, I have an economics in-class test coming up on economic issues. It's only on unemployment, inflation and selected parts of wealth and y, and eco. growth. The test will only be multiple choice and a couple of short answers so I'm wondering if I will need to know any unemployment or inflationary trends for the test or if they are mostly used in essay questions? Thank you!!! :))
Hi!
Could you please explain to me the effects of a recession on an economy (and also how/if this differs from just a general contraction)? Also, how can the government intervene to stimulate the economy?
Thank you.
Hey guys, if anyone could please help me answer the following questions that will be awesome:
1. Distinguish between the effects of a depreciation and an appreciation of the Australian dollar on exports prices, import prices and inflation (3 marks)
2. Analyse the impact of a sustained appreciation in the Australian dollar on the balance of payments and the rate of structural change in Australian industry (5 marks)
Thanks in advance!!
"what are the impacts on the australian economy of a sustained appreciation of the australian dollar"
What is the best way to structure a response to this question, I've created an intro but I'm having trouble deciding what to base my body paragraphs on . Should structure each paragraph based on the components of Aggregate Demand, i.e Consumers, Government, Investment, Imports and Exports, or should I structure it based on areas such as the Current Account Deficit, Inflation, Unemployment, Structural Change and Economic Growth.
Hey!
I am wondering if someone was able to summarise the Balance of Payments because I am not really grasping the whole concept of it all.
Thanks in advance!
Can someone tell me the consequences of the Current Account Deficit, I can't seem to find it in the textbook
Hey!
If you have the Tim Dixon textbook its on pages 124 - 126.
hi, would anyone know an economic cost of a free trade agreement involving Australia? would trade diversion count or are there better options? thanks in advance.
Helloooo, this is from 2010 MC.
Which of the following is most likely to shift both the aggregate demand and aggregate supply curve to the right?
(A) An increase in investment and a reduction in subsidies to producers
(B) An increase in the budget deficit and a decrease in the cost of labour
(C) An increase in the productivity of labour and an increase in interest rates
(D) An increase in the budget surplus and an increase in the cost of raw materials
In short pls help me i'm failing this subject.
Is the answer B?
It sure is, I just have no idea why lmao
Hey!
Can someone explain how to do this question and get the answer C. I understand the part about increased purchasing power for Australians travelling overseas but I don't get the domestic part.
Thanks :)
Holy crap, this is a massive curveball haha! I get why you're stuck, my original thought was that the purchasing power would be weaker in year 1 compared to year 2, thus the purchasing power would relatively increase even if overall there was a decrease due to inflation. But then I reread your post and the answer was C, so obviously that wasn't it.
Okay, this took me a while to wrap my head around, but it's the only plausible explanation I can come up with that results in C.
Hypothetically, say there's an economy with inflation of 200% one year then 100% the next. In this economy, the oranges are $5 at the beginning, and you have $30 in your pocket as a domestic consumer. By the end of year one, oranges are worth $15 [(100%+200%)x$5]. However, by the end of year two, oranges are worth a massive $30 [(100%+100%)x$15]. In year one, you could buy two oranges, but in year two you could only buy one. Therefore, even though inflation has decreased, your purchasing power still diminishes over these 2 years. Hence, you can extrapolate this to 2%/1%, exaggerating the numbers just made it easier to illustrate my point lol.
So, while the inflation rate HAS in fact decreased compared to the previous year, inflation is STILL occurring so the real value (purchasing power) of any given amount of money has decreased. I suppose this is true regardless of the inflation rate as long as it is positive, even if it is 0.00001%. lol
I hope this helped! x
Omg thank you so much! This actually makes so much more sense now. My class has literally been arguing for 2 lessons on this question because no one could understand that even though inflation decreased, you would lose your purchasing power.
If they gave me this question in an exam I honestly would full get it wrong.
Hi guys,
Does anyone have any suggestions as to how they would structure a micro essay and what they'd include?
Any past essays/scaffolds would really assist. Thank you very much !
Desperate help please!!!
3An economy has the following consumption function: C = 0.6Y + 500
If the economy currently has an equilibrium income of $600b, what would the new equilibrium income be following a decrease in autonomous investment of $10b?
(A)$525b
(B)$575b
(C)$583b
(D)$625b
Answer is B - I'm so stuck!!
Hey there! I have no clue how to include fractions on the actual site, so I attached a photo of how I'd approach this specific question. Hopefully you can read it haha
Ahh thank you so much!! Was full trying to rearrange the consumption function because when I asked my teacher first if I had to do the multiplier she was like oh nooo but now I get it
Hey guys,
Is there any difference between what is required in an economics essay or extended response? Or are they the same thing.
How would you llok at approaching this question:
Discuss the consequences of an unequal distribution of income and wealth and the impact of fiscal policy on the distribution of income in Australia
Hey Guys,
I have this assignmnet on the following question:Discuss the effectiveness of the government’s monetary and fiscal (budget) economic policies in achieving economic growth, low inflation and low unemployment for the Australian economy.
I am really stucked with this question. If anyone can give me any ideas on what to write that would truly be awesome.
Also, with regard to monetary policy, am I suppose to be looking into the recent changes in terms of the cash rate (e.g. should I talk about what are the implications of keeping the cash rate steady?)
Thanks in advance!
Hey guys,
I need help on structuring an essay for environmental sustainability of Topic 3. How would I approach it? Where would I need to incorporate govt policies within it?
Thanks!
Hey Guys,Hey Joe, (again - I seem to be following you a bit on the various forums haha)
I have this assignmnet on the following question:Discuss the effectiveness of the government’s monetary and fiscal (budget) economic policies in achieving economic growth, low inflation and low unemployment for the Australian economy.
I am really stucked with this question. If anyone can give me any ideas on what to write that would truly be awesome.
Also, with regard to monetary policy, am I suppose to be looking into the recent changes in terms of the cash rate (e.g. should I talk about what are the implications of keeping the cash rate steady?)
Thanks in advance!
Hey Joe, (again - I seem to be following you a bit on the various forums haha)
Hey!!!
ummm.... bit stuck in my assignment but just have the following questions....
Year 1 - Revenue 825 - Expenditure 700
Year 2 - Revenue 900 - Expenditure 800
Calculate the budget outcome for Year 1
What is the budget stance for Year 2?
And last question.... Explain how the RBA, through Domestic Market Operations, would decrease interest rates in the economy...
Any help would be muchly appreciated as it is due tomorrow!!! and fighting a cold (= not thinking clearly)......
Thanks Heaps!!!!!!!
For year 2, the budget is still in surplus as government revenue is still greater than government expenditure. However, the budget in Year 1 was a surplus of $125 million and in Year 2 the budget was in surplus of $100 million. The budget surplus got smaller so therefore the budget stance is expansionary.
Thanks heaps!!!!!!!
Just a quick question. On the table with the numbers it says Expenditure ($a).... what does that mean????
Thanks again..
Expenditure is how much money the government spends each year on things such as infrastructure projects, unemployment benefits, etcThanks... but wondering why is says in is in $a??? See image.
Thanks... but wondering why is says in is in $a??? See image.
Probably just a typo!
Sorry!!! Me again.....
Just two more questions! If someone could help be MUCHLY appreciated...
1) Explain how fiscal policy might be applied to improve a country’s external stability. (5 marks)
2) Discuss the effectiveness of fiscal policy at increasing the level of economic growth during a recession? (5 marks)
Thanks again!!!!
Hi,
So I'm doing the Financial markets topic of the prelim year and am struggling to memorise the features of the terms e.g. ASIC, APRA, RBA, credit unions, investment banks etc., as there is a lot of theory. I find the other topics so far more logical rather than memory-based e.g. supply and demand.
How do i tackle this?
Thanks
1. So for this question you can think about external stability as measured by the CAD, foreign debt, terms of trade, exchange rate, and/or international competitiveness. How does FP affect all of these measures?
An expansionary stance on the budget would inc economic growth, potentially worsening the CAD and putting us in greater foreign debt (to fund investment), but it may also improve our terms of trade (if demand for our exports grow) and cause an AUD depreciation (which means we're more internationally competitive. And vice versa for a contractionary stance.
You could also mention how low budget deficits/surpluses are seen as a greater sign of external stability by investors, which is why we're currently trying to bring the budget into surplus.
2. Ooh, now this question gets into a discussion of the strengths and weaknesses of FP. So economic growth can be measured by AD = C + I + G + X - M, meaning the government can directly impact the level of AD by changing G. And one of the big features of FP is that it has a short impact time lag-- so it'll get ya out of the recession fast.
The downside? We only change the budget once a year. So if the recession happens a month after the budget is released, we're kinda stuck with our current expenditure/taxation for another 11 months (in theory at least, in practice we have a Mid Year Economic and Fiscal Outlook around December to make revisions).
But hey, we've also got automatic stabilisers, which adjust the level of expenditure and taxation according to economic conditions. So while these stabilisers alone aren't very helpful in fixing a recession, they'll help slow the impact.
Hope this helps! :)
Hey wlam! Welcome to ATARNotes! :)
And yeah, Economics definitely has its sections where it's pure memorisation. For these sections, I rely heavily on things like flashcards and read-writing (name in progress, but basically reading a page of your notes and then trying to write down as much of it as you can-- rinse, repeat, until you get all the information). If you can remember what the abbreviations stand for, you can sometimes figure out what they do from the name.
Good luck in your studying!
Heyy guys! Coming up to trials I'm trying to get a grasp on my notes and memorising content. As the subject is so content rich I was wondering if anyone had any tips on how to layout notes and how to summarise the info so its easier to memorise and not so overwhelming/content overload. Thank you!!! :)
Heyy guys! Coming up to trials I'm trying to get a grasp on my notes and memorising content. As the subject is so content rich I was wondering if anyone had any tips on how to layout notes and how to summarise the info so its easier to memorise and not so overwhelming/content overload. Thank you!!! :)
what key things i should talk about in this essay question
Explain how movermnet in the australian dollar can affect the perfomace of the australian dollar
what key things i should talk about in this essay question
Explain how movermnet in the australian dollar can affect the perfomace of the australian dollar
Hey there! I'm assuming you mean in the Australian economy? Just at the top of my mind, I would probably address how exchange rate fluctuations impact foreign equity and liabilities (so external stability), international competitiveness (i.e. dutch disease which eroded non-mining sectors in the mining boom due to sustained appreciation), impact on domestic consumption (i.e. depreciation discourages Australians from buying imports), valuation effect, debt trap scenario, imported inflation and perhaps the RBA's interventions in response to these issues. Because you have to address cause and effect for an explain question, you should probably draw on the fundamental reasons for exchange rate fluctuations in one paragraph with diagrams to illustrate this. For instance, depreciation can be caused by a decrease in demand for Australian exports or a reduction in our interest rates, and vice versa. Hope this helps!
I was wondering for this multiple choice question, how do you figure out if the purchasing power of consumers in the domestic economy increases or decreases? I'm a bit confused on the logic there and I feel like I'm missing something.
It's from the HSC 2016 paper :)
Hey,
I've answered this before so I'll just paste my answer here:
I exaggerated the numbers a bit so that the effect is a bit more clearer to recognise.
Hypothetically, say there's an economy with inflation of 200% one year then 100% the next. In this economy, the oranges are $5 at the beginning, and you have $30 in your pocket as a domestic consumer. By the end of year one, oranges are worth $15 [(100%+200%)x$5]. However, by the end of year two, oranges are worth a massive $30 [(100%+100%)x$15]. In year one, you could buy two oranges, but in year two you could only buy one. Therefore, even though inflation has decreased, your purchasing power still diminishes over these 2 years. Hence, you can extrapolate this to 2%/1%, exaggerating the numbers just made it easier to illustrate my point lol.
So, while the inflation rate HAS in fact decreased compared to the previous year, inflation is STILL occurring so the real value (purchasing power) of any given amount of money has decreased. I suppose this is true regardless of the inflation rate as long as it is positive, even if it is 0.00001%. lol
I hope this helped! x
Thank you!!
I also had a question about unemployment and inflation - does a rising inflation rate lead to lower or higher unemployment and why?
I've heard different answers from people so I wanted to clarify.
An increase in inflation will lead to a decrease in unemployment. Inflation will lead to a wage price spiral, where employers will request wage rises so that they can meet their consumption expenses. The increase in wages/income will then be an incentive for those unemployed to find work as soon as possible - to take advantage of the high and increasing wages, and hence there will be less unemployment.I can see what you are saying but ultimately an increase in inflation results in an increase in unemployment. As price inflation of goods and services will lead employees and unions to request/get wage increases to meet their consumption needs as you said, this increases the cost that a employer will have to pay each employee. However, employers are more likely to reduce their workforce or switch to more efficient capital options to keep production costs down and profits up. Unfortunately, because of this high wages is a incentive for the unemployed but because the job market is diminished, unemployment will ultimately increase.
The Phillips Curve will show this :)
Thank you!!
I also had a question about unemployment and inflation - does a rising inflation rate lead to lower or higher unemployment and why?
I've heard different answers from people so I wanted to clarify.
The answers you have gotten have probably confused you a little bit - both are correct to some extent however I'll try and put it in the simplest explanation.
Possibly the best way to do is break this up into short and long term impacts.
If unemployment is below the Non-accelerating inflation rate of unemployment (NAIRU) this will increase inflation. Because of economic growth, firms aren't looking for more firms new workers to enter the workforce. As such, they pay increased wages to those already in the workforce to attract the best existing labour. This therefore increases inflation. In the same way, if the government wanted to try and increase employment via macroeconomic policy, this would be successful in the short term at reducing unemployment, but over the long term wage increases won't keep up with inflation and as a result, firms will be forced to sack some of their workforce, which increases unemployment. Unemployment will return back to NAIRU.
So easiest way to remember it: growth and unemployment are interdependent on each other. An increase in growth will (generally) increase employment. Once it does this and forms are forced to compete for the best workers and thus increase their wages, this creates inflation.
However over the long term, this growth in wages cannot keep up with the wage of inflation, which increases firm costs because employees will want wages to keep going up. Forces firms to fire staff- therefore increasing unemployment.
I hope that answer was comprehensive and makes sense
I am having trouble working out this MC question from 2017 HSC: In 2019, one US dollar buys 1.25 Australian dollars. In 2020, one Australian dollar buys 0.75 US dollars.Well, for US$1, they are getting AU$1.25 - 25 cents more.
Which statement is most correct?
A. There is no change in the exchange rate between 2019 and 2020.
B. Australian exports to the US are less expensive in 2020 compared to 2019.
C. Goods imported from the US are more expensive in 2019 compared to 2020.
D. For US investors, Australian assets are more expensive to buy in 2020 compared to 2019.
I am most confused about the conversions how do you change the ratio of dollars to better understand what is going on?
Thankyou
Well, for US$1, they are getting AU$1.25 - 25 cents more.
Conversely, for AU$1, we are getting US$0.75 - 25 cents less.
the difference either way is the same, so I'd say that the exchange rate has not changed. Therefore A.
I am having trouble working out this MC question from 2017 HSC: In 2019, one US dollar buys 1.25 Australian dollars. In 2020, one Australian dollar buys 0.75 US dollars.
Which statement is most correct?
A. There is no change in the exchange rate between 2019 and 2020.
B. Australian exports to the US are less expensive in 2020 compared to 2019.
C. Goods imported from the US are more expensive in 2019 compared to 2020.
D. For US investors, Australian assets are more expensive to buy in 2020 compared to 2019.
I am most confused about the conversions how do you change the ratio of dollars to better understand what is going on?
Thankyou
Well, for US$1, they are getting AU$1.25 - 25 cents more.There is definitely a change in the exchange (after converting either way).
Conversely, for AU$1, we are getting US$0.75 - 25 cents less.
the difference either way is the same, so I'd say that the exchange rate has not changed. Therefore A.
I agree with Emily's answer.That is correct. I'd also like to add that we can also confirm the answer, by doing the calculation from the US's perspective.
Value of AUD in 2019 = 1 / 1.25 = 0.8
Value of AUD in 2020 = 0.75
Thus AUD has depreciated against USD, resulting in B :)
Unemployment question: If a scenario such as this was in a MC question "Charlie doesn’t have a job and gave up looking for one due to poor economic conditions in his town"... This would count as hidden unemployment right? However is he recognised under the unemployment rate - since he is not actively seeking work. Simply put: is hidden unemployment recognised in the unemployment rate and the labour force?
Hello
Can someone please explain the answer of this multiple choice?
a call-centre operator has been made redundant as her position has been replaced by an automated system. Identify the most appropriate category for her situation.
The answer says Underemployment; I thought it was structural unemployment.
Thank you heaps!!!
Mmmhh... I agree that it should be structural unemployment (unemployment due to structural changes such as new technology which results in skills not being in demand in the labour force).
Underemployment means either that they are not working as many hours as they would like, but are still employed; or someone is working in a job that does not fully use their skills (e.g. a person with a commerce degree working in a fast food chain). The situation described here really does not fit either meaning (because she is unemployed not employed in a job without enough hours or use of her skills).
Was this an exam created by a school? Perhaps, it would be best to clarify whether there was some mistake made in the answers.
I had a quick question wondering if the NAIRU and 'natural rate of unemployment' are the same thing (the level of unemployment without cyclical factors and inflation is stable) ?
Thank you!
I had a quick question wondering if the NAIRU and 'natural rate of unemployment' are the same thing (the level of unemployment without cyclical factors and inflation is stable) ?
Thank you!
I guess the concept behind each is quite similar. From my understanding and because the definition is just fresh in my head because I had my trial yesterday:
* The natural rate of unemployment is the the level of unemployment in the economy where there is no cyclical unemployment, therefore only structural, frictional, etc. Under the RBA Act 1959, full employment in the economy is said to be 5-6% unemployment
* The NAIRU is the level of unemployment in the economy that can be maintained without inflationary pressures occurring
This is just how I see it, wouldn't mind other opinions!
Hi!!
Can someone please explain to me about the recent trends in unemployment in the past few years (preferably after 2011)? Can someone discuss the reasons for these trends like the Mining Boom II etc.
Thanks
:) :)
Hi,
These are my notes on the unemployment trends of Australia:
• Australia began experiencing higher unemployment rates in the mid 1970s, after recording very low unemployment rates in the 1960s and 1970s. The rate of unemployment peaked in the early 1990s due to structural changes and the 1990-91 recession – the unemployment rate was 10.7% in 1992-93 (the highest since the Great Depression of the 1930s).
• Following the 1991 recession, there was a steady decline in Australia’s unemployment rate during the consecutive years of economic growth.
• Unemployment fell to a record low of 4.2% in 2007-8, during the peak of the Mining Boom.
• In 2008-09, the GFC had a major impact on the Australian labour market, with unemployment rising to 5.8% in 2008-9 due to low growth of 1.7% in the economy. However, there was a quick recovery and unemployment fell to 5.1% in 2009-10 due to the continuing Mining Boom.
• The Mining Boom ended around 2013, leading to unemployment rising to over 6%.
• In March 2018, the unemployment rate was 5.5% due to a record 17 consecutive months of job growth. Most recent stats show that unemployment is now at 5.4% in July 2018 (due to continuing steady job growth and a slight decline in the participation rate). \
Hi, I've been trying to solve past mc questions when I stumbled upon a question that tricked me a little. I tried solving it but couldn't quite get the right answer. Its 2017 HSC MULTIPLE CHOICE QUESTION 19. anyone help me out?
I also have half way gotten there but need some help understanding the entire concept.
I know there is no specific formula but first step is using multiplier to find MPC. find MPC. and then? I don't quite get how MPC could be used to find consumption and national income.
Could someone help me out with the attached multiple choice question please (((:
So you first find out the MPC which is 200-110/300-150 = 0.6
Then now you know the MPC is 0.6 that means the MPS is 0.4
Then you do the multiplier so k = 1/0.4 which is 2.5
Then because it increased by $40bn you do $40bn x 2.5 which is $100 bn - This is the increase in national income
Ahh thank you didn't realise it was a multiplier question ::)
Lastly, to find the new equilibrium level of income you do $100bn + $300bn = $400bn
Therefore, the answer is C ;D
How much evidence do we need to be incorporating for the short answers or is pure theory to answer the question enough? Usually at most I would make reference to a real world example if it's relevant - e.g. closing down of motor car industry for a question asking about removal of subsidies or structural unemployment - asking this because I lost 4 marks in my trials because I lacked 'evidence' in the form of statistics to back up my explanations
Also any ideas on approaching a macroeconomic policy essay? The only thing I have in mind right now is basically dividing the essay into fiscal and monetary, then writing how each works to address certain economic objects (usually internal stability but may include others based on the question). And even then I'm not entirely sure how to structure these paragraphs
is there a specific structure for eco essays? also my teacher always says don't describe in an eco policy essay like anything- but almost every sample I read has a bit of description. in general for all essays, should historical trends be incorporated in one para or thought the essay & in an eco policy essay is it necessary to mention very old policies or should I go straight into contemporary policies?
another question, is the Carbon Pollution Reduction scheme still running?
if anyone has a sample band 6 environmental essay please send!
For this question, it doesn't specify if global or domestic trade policies so does that mean you can talk about the effects of domestic and global protectionist policies on the Australian economy??
"Analyse the effects of protectionist trade policies on the Australian economy."
Hey guys!
I was wondering whether anyone can help me with the concept of terms of trade?
when there's an improvement in the tot, does that mean that the revenue gained from exports exceeds the amount the country pays for imports?
so if for example, we sell 100 exports for a $1 each (for simplicity), we get 100 in total, but if the following yr we sell 200 exports for a $1 each, we get 200 in total- is that an improvement in the tot?
Please, i'll really really appreciate any clarification.
Hey, the example you provide doesn't really provide any indication of the ToT because it's all relative to the PRICE of a given amount of imports - not the VOLUME, as you seem to be under the impression of.
If the ToT improves, this means exports are increasing relative to import prices. For example, if in 2017, exports and imports were both $1, the ToT would be 1/1 x 100 = 100 (remember ToT = export price index/import price index x 100). But say in 2018, export prices rose to $3 due to higher global demand, whilst imports only rose to $2, this would mean that export prices are outpacing import prices, so the ToT would improve from 100 to 150. That would mean we can buy 1.5x more imports with the same amount of exports. So in this case, the export revenue earned from 20 transactions would be $60, which can buy 30 imports (because they're priced lower at $2 remember).
I hope this makes sense! :)
thank you so much- so its the price of the exports/imports that effects it so nothing to do with the total value of the imports/exports?
i'm confused as to how they may work out a price if there are so many different types of exports- is it an average of the price of all exports/imports?
Hi I just have a question based on the globalisation topic: so I have a prepared essay in point form for a broad question on 'assessing the impact of globalisation', while the syllabus specifies that we must have a case study showing the effects of globalisation on an economy other than Australia (which I also have prepared for) it doesn't specify that it can ask for the effects of globalisation on Australia specifically - is this something that we are assumed to have stuff prepared for that they can ask and if so what things should we be talking about?
Thankyou
Hi I just have a question based on the globalisation topic: so I have a prepared essay in point form for a broad question on 'assessing the impact of globalisation', while the syllabus specifies that we must have a case study showing the effects of globalisation on an economy other than Australia (which I also have prepared for) it doesn't specify that it can ask for the effects of globalisation on Australia specifically - is this something that we are assumed to have stuff prepared for that they can ask and if so what things should we be talking about?Heya, from past exams, they have usually specificied whether they want either Australia, another country, or both at once.
Thankyou
Yeah look, I would definitely suggest that your prepared essay be broad, and be very much general dot points and arguments, because usually its just not worth the risk or effort to use a prepared essay in an economics exam. If it doesn't fit the question, you just will not get top marks at all.Otherwise, Caleb is on the point, it isn't really worth preparing an essay specifically. Since economics is such a broad and connected subject, the question can be on basically anything and trying to pin it down with a prepared essay is risky and might be a inefficient use of time. More generally speaking, they expect you to have fairly extensive knowledge on Australia's economic policies and very well may ask us in the exam to go on at length about them. I would recommended summarising and revising the strategies of both Australia and another country but I wouldn't go much further than that. Hope this helps!!
But yes, if they asked for the impact of globalisation, I assume that they would very much expect you to talk about Australia. I would suggest maybe a 2/3rds Australia, and 1/3rd other economy, if you wanted or even 100% Australia. But if they ask specifically for another economy other than Australia, then do more obviously.
I don't think they would ask specifically for Australia as it is a given that it is about Australia if not specified otherwise.
Hi could someone help me out as I get bit confused between the different types of efficiency.. If a resource is not being used in the most efficient way is this a lack of technical or allocative efficiency and why?Hey, so in that case it would be a lack of technical efficiency. As it is talking about the use of a resources, so it's talking about the productivity. Here is a quick definition of the three main efficiences:
Thanks in advance
Hi, could someone please help me differentiate between foreign aid which goes into the capital and financial account and foreign aid which goes into the net secondary account of the current account - I have heard so many explanations but they all seem to contradict each other and I keep getting multiple choice questions wrong.. thank you!
Hello first post here! what statistics should be memorised for the upcoming essays in the economics exam? Any key topics/statistics or trends?
Hi! Just came across a past HSC question (2015 Q15):
Which of the following could lead to a deterioration in the structural component of Australia's current account deficit?
a) An increase in net foreign liabilities
b) A decrease in portfolio investment by foreign firms
c) A decrease in export volumes due to a weakening global economy
d) An increase in imports resulting from an improvement in the terms of trade
I'm not too sure how to answer this question. What does it mean by 'deterioration in the structural component of Australia's CAD'? Thank you!
Then with this hsc question "Australia provides foreign aid to build schools in a developing country. how is this recorded" why was the answer still in the capital account when it is a specific thing?The main reason why it is the capital account is because it factors in "conditional aid". Because the government is providing money specifically for building schools, this is a form of conditional aid, hence it is recorded on the capital account. Hope this helps!
Hi! Just came across a past HSC question (2015 Q15):
Which of the following could lead to a deterioration in the structural component of Australia's current account deficit?
a) An increase in net foreign liabilities
b) A decrease in portfolio investment by foreign firms
c) A decrease in export volumes due to a weakening global economy
d) An increase in imports resulting from an improvement in the terms of trade
I'm not too sure how to answer this question. What does it mean by 'deterioration in the structural component of Australia's CAD'? Thank you!
Hey I was wondering how many pages are expected for a 19-20/20 essay in economics? I usually write around a full booklet (7-8 pages) but in the case there is an essay on something like environment then I think I'd be looking at like 5 pages. Anyone know roughly what the HSC markers expect to hit those really up tier responses assuming the content itself is strong, detailed and data-supported?
/quote]
This is obviously very late, but if you want my 19.5/20 2018 HSC Economics essay I can upload it.
Hi,
So with subsidy diagrams, are the foreign importers not considered at all? Eg. in tariff diagrams, the importer revenue can be calculated. Is this unable to be calculated in subsidy diagrams?
Also, why, when domestic suppliers get subsidies, do they decrease their supply? Wouldn't it be more beneficial to keep their supply at the same level, as they would get a greater overall revenue?
I've attached a diagram, which I'm not sure if it is helpful.
Thanks
hi!
I need help with an assessment! So the question is Evaluate the economic growth and the economic development of the Brazilian economy in the last decade in regard to its integration into the global economy.
My teacher suggested we break the assessment up into sections: intro, global impact (e.g. quality of life, unemployment, trade, eco policies, etc), impacts of globalisation (e.g. market deregulation, protectionism, joining trade blocs or unions, TNCs, etc), conclusion.
I'm confused as to how I should go about answering the question, and how I should structure it?
Thanks heaps
Hi!
I am freaking out about my economics exam next week. How would you answer this; "Using examples, discuss the main macroeconomic and microeconomic effects of protection on a national economy like Australia"
I discussed general advantages/disadvantages of protection and assorted them intro macro and micro but its worth 5 marks and the info I have doesn't seem sufficient.
Thanks!
meerae :)
Hi, is someone able to help explain to me how tariffs, subsidy and quota diagrams work? I just don't get them at all :(
thanks!
Hi, is someone able to help explain to me how tariffs, subsidy and quota diagrams work? I just don't get them at all :(
thanks!
anyone know the impact of a reduction in protection on the CAD (current account deficit)? i am confusion, :'( please help!!!!!!!!
Hi all,
How should i go about studying and revising for eco, especially taking into consideration I practically have learnt nothing ...
is there any hope for me?!
thanks!
hi all,
i have a really bad teacher for eco and he doesn't teach anything - i don't learn in class and for prelims, i had to teach myself the content! Do you guys have any advice for learning the year 12 content, and how difficult would it be for me to teach myself at this point in the hsc year?
thanks!
I have an economics assignment due soon and its on comparing the australian economy and one other asian economy. Its a presentation 3-4 mins. In my speech i was wondering whether or not i should start with a definition for each subslide like economic growth, quality of life, etc????
Hi,
I have a question on topic 2 for eco.
What is the relationship between the first 2 dot points
value, composition and direction of Australia's trade and financil flows to the next 3 points Australia's Balance of Payments, exchange rates and free trade and protection?
Non-rural goods, in seasonally adjusted terms at current prices, rose $5.59 billion or 8 per cent to $75.3 billion. This was driven by metal ores and minerals, up $1.6 billion or 7 per cent, and coal, coke and briquettes up $989 million or 6 per cent.
Is this part talking about terms of trade? How does this impact Australia's trade?
Theoretically, does a decrease in the demand of AUD happen when China bans Australian coal? Does this cause depreciation?Hey Chelsean,
I'm super confused, can someone show me the working for this?
hellooo
My eco teacher is really bad and I haven't learnt anything all year :/ How difficult do you guys think it'll be for me to get a band 6 if I'm studying off the textbook and trying to teach it to myself? Also, is it actually possible to teach the entire subject to myself this late into year 12?
thanks!!
When writing essays, in some topics, is it still necessary to use trends from the GFC to compare to recent trends even though it was almost 10 years ago?
What are all the economic statistics and trends that I should memorise when I am preparing for trials and HSC?
Also which other year's stats should I also memorise to show the medium or long term effect?
Thanks
Hello, I'm having a bit of trouble trouble finding a fiscal and monetary policy that has affected External Stability.
Can someone please tell me an example of a government policy that has been put in place that has affect external stability?
:)
Can someone answer this question:
What is the relationship between productivity and technical efficiency?
When writing essays, in some topics, is it still necessary to use trends from the GFC to compare to recent trends even though it was almost 10 years ago?
I also have another question: if fiscal policy is contractionary, should monetary policy then be expansionary or contractionary to work well together?
I'm just really confused as to whether fiscal policy stance and monetary policy stance should be opposite to each other or the same, so as to achieve the government's economic objectives?
Thanks!
I don't know how to answer this essay question:Is this a short answer question? If so,
Analyse the causes and effects of external stability.
This is a question from topic 3 economic issues.
Any advice on how to structure a response on this and how to answer this question would be greatly appreciated.
Hi,
For economics essay question to analyse the effectiveness of policy. Do I need to talk about how the policy works?
Hi,
For my case study, I am doing China. Do I need past strategies and contemporary strategies such as Open Door Policy and contemporary ones?
hey peeps, i need help with this question please (2017 HSC economics)
So you basically have to just do trial and error with each option. So you know that 2.5=1/(1-MPC), which is just the formula for the multiplier. So then for the first one for e.g., you have to see if 1/(1-(250-100/1000)) equals 2.5, and so on until one of the fractions equals 2.5.
Hope that makes sense :)
So you basically have to just do trial and error with each option. So you know that 2.5=1/(1-MPC), which is just the formula for the multiplier. So then for the first one for e.g., you have to see if 1/(1-(250-100/1000)) equals 2.5, and so on until one of the fractions equals 2.5.
Hope that makes sense :)
Hello!
Has anybody got some nice recommendations for my Economics Case Study? I was considering doing Japan, South Korea or India, but I would really appreciate some suggestions and maybe why you've recommended that particular country.
Thanks so much!
Explain how a floating exchange rate helps achieve equilibrium in the balance of payments.
Can anyone help?
Hi, year 11 going to year 12 here. I was wondering what equipment you recommend for economics and what helped you when studying? My school hasn't provided an equipment list and I wanted advice from people who have done economics.