HSC Economics Question Thread

[hermansia12]

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

Ahh ok, In that case, I'm pretty sure the gap you're talking about would just be Q1-Q from the graph that I previously included. If suppose they said that the subsidy costed $1000 in total and that before the subsidy they were supplying 50 units at $10. The subsidy will shift supply to right as the price falls to $5, find the quantity that the economy can now supply  (I'm just making this question up I have never actually seen this in a practice paper)

Subsidy is the area of the rectangle caused by the shift, so the width would be $10-$5 =$5;
Then dividing by $1000 gives 200 (the length) = the new quantity that the economy can supply

i.e economy can now supply 200 units of the good -> Increasing by 150 units  from the 50 units of the good pre-subsidy

I hope this is what you're asking- sorry about the confusion

[hermansia12]

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 think you're right - I was thinking about how investment lowering prices for consumers as industry becomes more productive so consumers spend more. Your answer is more direct and would be the right one.

[Deng]

Just wondering how are people remembering stats and trends etc because ive been trying since friday and they arent sticking for me :/

[nancy_cc]

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.

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!

[hermansia12]

Just wondering how are people remembering stats and trends etc because ive been trying since friday and they arent sticking for me :/

When I did my exam, I was sticking the snapshot trends all over the house and had them written on my arm so that even if I was doing the dishes I would have to look at them and remember them visually.My friends all found it odd that my arm was always full of numbers and facts but it worked really well because I would associate that fact with that place on the hand/arm so that I would remember in the test. Although scrubbing numbers off your arm night before the test made my family reconsider my sanity.>.<

Another method was that I would associate the statistic with the economic issue when I did practice papers so that like the BBC version of Sherlock, when I was writing an answer about that specific economic issue, it jogged my memory of the stat in my "mind palace".

Hopes this helps

[kevin217]

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.

[hermansia12]

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!

Generally an increase in retirement will be compensated by the high amount of youth unemployment in Australia. As people retire, people enter the workforce. We actually have problems in the Australian economy with retirement age increasing as people are holding onto their jobs longer making it more difficult for young people to find a job.

However, those in hidden unemployment are usually those returning to the workforce after being long term unemployed so they may find it difficult to find a job immediately upon entering the workforce. This increases the unemployment rate. Until they are retrained into jobs with high structural unemployment which will eventually see the unemployment rate decrease and participation rate increase. Hence, leading to a short term increase on unemployment

[Giraffes are tall]

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!

[isaacdelatorre]

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?

[birdwing341]

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?

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?

[Giraffes are tall]

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

[isaacdelatorre]

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!

Hi Giraffes are tall,
What question were you looking at? question 7 doesn't have a table, question 7 is about implementation and impact of economic policies...
Are you sure it was 7?

[isaacdelatorre]

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?

Oh, that does make sense, although is that a "positive correlation" not sure what it means by positive...

[birdwing341]

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

I could be wrong here, but you can count it as both. Personally, I'd be more inclined to talk about marginal tax rate increases as discretionary fiscal policy, but you could do either

Oh, that does make sense, although is that a "positive correlation" not sure what it means by positive...

I think it just means that as one goes up, so does the other...kinda badly worded but I guess that's what it is

[isaacdelatorre]

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

Hey there,

If the government directly changes the tax rate for a tax bracket this is a discretionary change to fiscal policy (since they are changing the taxation/expenditure plans of the economy), I wouldn't consider it a microeconomic reform or talk about it in a micro essay as it isn't really increasing efficiency in any way - so it would b pretty ineffective as a reform. It is mainly creating a more equitable distribution of income

Hope this helps