Economics Questions Thread

[Jono_CP]

Yeah I just found out that I think I am the highest ranked in our economics class... So weird, like I am not even averaging 90%+, and there are some really clever students in our class. I think our's should be marked up.

[Jono_CP]

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[Jono_CP]

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[chasej]

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I think your issue may be that you are reading the questions to fast and missing out on those little nuances which change the answer, although the 2nd question is pretty badly worded.

For the 1st question:
You're asked what decreased the underlying defecit, decreasing the defecit means government payments are exceeding receipts by a lesser amount than before. By process of elimination, the medibank option although an increase in receipts is one off and thus does not effect the underlying defecit. Interest rates have no direct effect on the budget outcome.

Those ones you should eliminate immediatly and then you're left with two. Option C increase payments, which increases the defecit. However option D increases receipts through increased taxation, reducing the defecit, hence is the correct answer.

For the 2nd question:
What the question is essentially asking (in very bad wording), is what happens to the budget outcome when economic growth is increasing and government makes no discretionary changes. A we eliminate immediatly as it talks about the discretionary section of the budget and the question specifically excludes such items. B is incorrect as the defecit will decrease in times of increased growth (as those relying on welfare such as unemployed decrease and government starts collecting more incomes taxes). C again talks about the structural outcome which is irrelevant. D is correct as the decreased defecit as a result of economic growth increasing decreases the net aggregate demand the government is contributing to the economy, hence reducing economic activity.

Advice:
For MC you need to fully read the question and break down what it is asking. For most questions you should determine the answer before you even read the available options. For example if a question asks "what happens to the cyclical component of budget in times of decreased economic growth", I can immediatly dejuce the correct answer would involve something which decreases receipts and increases payments in the budget, hence reducing a surplus or increasing a defecit. Highlighting key words in the question and subsequently available answers is a great way to make sure you fully read and understand the question.

[Jono_CP]

I think your issue may be that you are reading the questions to fast and missing out on those little nuances which change the answer, although the 2nd question is pretty badly worded.

For the 1st question:
You're asked what decreased the underlying defecit, decreasing the defecit means government payments are exceeding receipts by a lesser amount than before. By process of elimination, the medibank option although an increase in receipts is one off and thus does not effect the underlying defecit. Interest rates have no direct effect on the budget outcome.

Those ones you should eliminate immediatly and then you're left with two. Option C increase payments, which increases the defecit. However option D increases receipts through increased taxation, reducing the defecit, hence is the correct answer.

For the 2nd question:
What the question is essentially asking (in very bad wording), is what happens to the budget outcome when economic growth is increasing and government makes no discretionary changes. A we eliminate immediatly as it talks about the discretionary section of the budget and the question specifically excludes such items. B is incorrect as the defecit will decrease in times of increased growth (as those relying on welfare such as unemployed decrease and government starts collecting more incomes taxes). C again talks about the structural outcome which is irrelevant. D is correct as the decreased defecit as a result of economic growth increasing decreases the net aggregate demand the government is contributing to the economy, hence reducing economic activity.

Advice:
For MC you need to fully read the question and break down what it is asking. For most questions you should determine the answer before you even read the available options. For example if a question asks "what happens to the cyclical component of budget in times of decreased economic growth", I can immediatly dejuce the correct answer would involve something which decreases receipts and increases payments in the budget, hence reducing a surplus or increasing a defecit. Highlighting key words in the question and subsequently available answers is a great way to make sure you fully read and understand the question.

Thank you so much chasej, brilliant advice as per usual!!!! much appreciated.

As well as reading the question too quickly, could this also be a comprehension issue? e.g. not understanding the content really well and just rote learning? I think I need to understand these concepts in order to get the multiple choice correct.

Do you recommend that I use an open book format when practicing multiple choice questions? How do I understand the content in economics as opposed to just note-taking etc??? Keeping up with the economics news?

Your knowledge was superb, and something even though it not possible for an incompetent such as myself, I aspire towards it nonetheless.

Thanks again!

[chasej]

Thank you so much chasej, brilliant advice as per usual!!!! much appreciated.

As well as reading the question too quickly, could this also be a comprehension issue? e.g. not understanding the content really well and just rote learning? I think I need to understand these concepts in order to get the multiple choice correct.

Do you recommend that I use an open book format when practicing multiple choice questions? How do I understand the content in economics as opposed to just note-taking etc??? Keeping up with the economics news?

Your knowledge was superb, and something even though it not possible for an incompetent such as myself, I aspire towards it nonetheless.

Thanks again!

Thanks mate, appreciate the compliments

Well last year my study consisted of, pre-reading before class, then writing handwritten notes with class, typing those notes, then cross-checking those notes with the text to ensure I didn't miss anything pertinent.

Then I would study the heck out of those notes, not to memorise them, but rather read through them until I got to the point where I understoof the way the concepts were interelated. I did a fair few flow charts to do this, like you put on concept in a box and link them to another with an other and make a note of the connection that makes that arrow.

In my opinion to ensure you understand you should be doing around 125+MC and 7-8 SACs worth of short answer in the lead up to a SAC, that way there's pretty much no question you can be asked which you haven't at least seen a varient of before. Meaning that hopefully you've identified any areas you don't get and rectified your knowledge.

Rote-learning is probably what's holding you back, like short answer you can probably do alright if you know definitions and understand what's going on in the economy and can make logical links. But MC are very theory based and that's what you need to understand. Especially because MC kind of force you into thinking and applying your knowledge one way whereas short answer often provide a little flexibility to how the question is answered.

[abcdqdxD]

125 MC for a SAC is pretty crazy. I don't think u need to do many to be honest. If you know the content well, you should know the answers straight away. Do MC closed book and timed.

[chasej]

125 MC for a SAC is pretty crazy. I don't think u need to do many to be honest. If you know the content well, you should know the answers straight away. Do MC closed book and timed.

I meant as you go along studying, like 20 from each chapter in the text, then what the prac SACs give etc.

It's pretty easy to make 125 over normal study of an AOS.

I guess it's different for everyone but I found it helpful doing a lot of MC. I don't really like MC at all though tbh.

[millie96]

how does a contractionary budget actually slow AD, and how does expansionary increase AD? can someone please explain the process thanks

[abcdqdxD]

how does a contractionary budget actually slow AD, and how does expansionary increase AD? can someone please explain the process thanks

Expansionary budget: Increase 'G" -> increase AD -> increase eco growth (thereby expansionary by definition) and vice versa for contractionary

[Rachelle]

Thanks mate, appreciate the compliments

Well last year my study consisted of, pre-reading before class, then writing handwritten notes with class, typing those notes, then cross-checking those notes with the text to ensure I didn't miss anything pertinent.

Then I would study the heck out of those notes, not to memorise them, but rather read through them until I got to the point where I understoof the way the concepts were interelated. I did a fair few flow charts to do this, like you put on concept in a box and link them to another with an other and make a note of the connection that makes that arrow.

In my opinion to ensure you understand you should be doing around 125+MC and 7-8 SACs worth of short answer in the lead up to a SAC, that way there's pretty much no question you can be asked which you haven't at least seen a varient of before. Meaning that hopefully you've identified any areas you don't get and rectified your knowledge.

Rote-learning is probably what's holding you back, like short answer you can probably do alright if you know definitions and understand what's going on in the economy and can make logical links. But MC are very theory based and that's what you need to understand. Especially because MC kind of force you into thinking and applying your knowledge one way whereas short answer often provide a little flexibility to how the question is answered.

In saying that with SA you can be more flexible, could you rote learn the content and apply it to such questions?
Also, where can we find to practice 125+ MC? I heard that the checkpoints weren't that good.
Would you recommend an economics dictionary to rote learn terms, or rather ones confined in the textbook?
Thanks

[abcdqdxD]

In saying that with SA you can be more flexible, could you rote learn the content and apply it to such questions?
Also, where can we find to practice 125+ MC? I heard that the checkpoints weren't that good.
Would you recommend an economics dictionary to rote learn terms, or rather ones confined in the textbook?
Thanks

Practice SACs from teachers and the Indigo study guide is a good start. Would recommend having fundamentals textbook if you're not using it already.

[abcdqdxD]

Ok I understand what automatic and discretionary stabilisers are; but is an increase in welfare payment an automatic or discretionary stabiliser?

Ie. in periods of recessions there is likely to be an increase in people unemployed, hence more welfare payments and more spending (since low income earners spend larger proportion of incomes). But is this an example of the government *deliberately* using its discretionary stabiliser to increase economic growth or is it an automatic process?

EDIT:

also, are transfer incomes and welfare payments the same thing? would it be just repititive to use them one after the other?

Welfare payments are automatic as it varies based on the level of AD and eco growth. Can be discretionary if govt changes rate of welfare indexation/payment rates.

Can treat transfer and welfare being the same thing in the scope of the VCE course. However, they are technically not the same.

[millie96]

Will we ever get asked about a specific fact about previous budgets?

Also can we use facts and information from any of the previous budgets or is it best to just talk about 2014/15

[abcdqdxD]

Will we ever get asked about a specific fact about previous budgets?

Also can we use facts and information from any of the previous budgets or is it best to just talk about 2014/15

Unlikely but possible.

I would focus on the current budget, but current policies implemented previously (such as NBN) can still be used.