ATAR Notes: Forum
Archived Discussion => Commerce Subject Exams => VCE Exam Discussion 2016 => Exam Discussion => Victoria => Economics Exam Discussion => Topic started by: abcdqdxD on October 27, 2016, 04:04:26 pm
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How did everyone find it? Was it difficult or relatively easy?
P.S. if anyone has a copy of the exam, PM me and I'll make solutions for MC
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I feel like I didn't do well in many questions especially the one that asked you to talk about operation of a specific market. :(
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MC was a breeze.
2 short answer questions were fairly odd. (both 6 markers).
A+ cut off predictions??
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the affect of an unfavourable movement in the Terms of Trade on: 1) current account 2) living standards
the obvious answer was an increase in the CAD and decrease in living standards... but after writing that i thought maybe the increase in competitiveness would cause a rise in exports relative to imports, causing the CAD to be reduced and the resultant lift in demand causing rise in employment and therefore living standards.
i changed to the latter and obviously explained in a bit more detail but now having very serious doubts and am pretty sure i fked it up. please confirm. :(
also the following are my answers for some of the more difficult MC in no order, please let me know if theyre wrong..
price may have risen or fallen
4% annualised inflation
expansionary MP and expansionary BP
private investment as most unstable component of AD
cash flow mechanism
lower gini and move lorenz curve closer to 45
year 2 lower participation rate and lower unemployment rate
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I think the exam was fair. Like always, they're going to be questions that will throw people sideways, but I think the difficulty of Unit 3 qs were compensated by the ones assessing unit 4 knowledge.
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the affect of an unfavourable movement in the Terms of Trade on: 1) current account 2) living standards
the obvious answer was an increase in the CAD and decrease in living standards... but after writing that i thought maybe the increase in competitiveness would cause a rise in exports relative to imports, causing the CAD to be reduced and the resultant lift in demand causing rise in employment and therefore living standards.
i changed to the latter and obviously explained in a bit more detail but now having very serious doubts and am pretty sure i fked it up. please confirm. :(
also the following are my answers for some of the more difficult MC in no order, please let me know if theyre wrong..
rice may have risen or fallen
4% annualised inflation
expansionary MP and expansionary BP
private investment as most unstable component of AD
cash flow mechanism
lower gini and move lorenz curve closer to 45
year 2 lower participation rate and lower unemployment rate
Hi there, your multiple choice all correspond to mine (im pretty sure), and I feel like I got 15/15 so well done!
However the TOT question, remember an unfavourable movement signals that overall, australia is trading unfavourably. Your thinking of a lower terms of trade increasing export volumes and competitiveness has nothing to do with export PRICES, which is all TOT is about. Moreover, the increase in volumes wouldn't outweigh the increase in prices AND volumes during periods of a higher TOT, so overall the effect on living standards and the current account would be negative.
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Hi there, your multiple choice all correspond to mine (im pretty sure), and I feel like I got 15/15 so well done!
However the TOT question, remember an unfavourable movement signals that overall, australia is trading unfavourably. Your thinking of a lower terms of trade increasing export volumes and competitiveness has nothing to do with export PRICES, which is all TOT is about. Moreover, the increase in volumes wouldn't outweigh the increase in prices AND volumes during periods of a higher TOT, so overall the effect on living standards and the current account would be negative.
Thank you!
Evidently i shouldve stayed with my original answer but i over thought it
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Feel like I stuffed up the 'choose your own market' question. Also the first multiple choice question for 'most unstable' as I put private consumption.
The girl at the top of ranking didn't do so well. Is it true you can't get a better exam grade than what the top ranking student gets?
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Hey abc,
When you get a chance to look at the exam could you please tell me if the following way of answering that choosing a factor that affects a market question was correct? I was very rushed at this question - too much time on policy mix.
What I talked about.
1. Relative prices in the commodity sector
2. What affects relative prices (e.g. demand/supply from china)
3. Theoretical example (if commodity demands increased)
4. As such, the higher demand for commodities (iron-ore) would leave a shortage blah blah
5. price signals, reallocation, relative profits e.t.c
- I didn't talk about the credit to product exchange nature of a market which is where i think i messed up.
Then for the last section, i just talked about how Australia operates a market capitalist system with private ownership of most resources (e.g. 20% government and 80% left to the market), and what is produced is largely dictated by consumers (Consumer sovereignty)
Thanks a bunch.
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The more I think about this exam, the more convinced i am that I got 0/6 for the operations in the specific market. I left it to last and panicked fucken hard with 5 minutes left. I ended up writing about the commodities market saying that it is Australia's biggest exporting industry and that it has a comparative cost advantage and so much bullshit. Then I wrote how China's shift to a services based economy meant a falling demand for commodities meaning slower growth and stopped there. I've cooked it hard hahah
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What were some of the tricker questions?
If someone could type them up I can give you guys some rough solutions
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Feel like I stuffed up the 'choose your own market' question. Also the first multiple choice question for 'most unstable' as I put private consumption.
The girl at the top of ranking didn't do so well. Is it true you can't get a better exam grade than what the top ranking student gets?
You can definitely get a higher exam grade than rank 1
Hey abc,
When you get a chance to look at the exam could you please tell me if the following way of answering that choosing a factor that affects a market question was correct? I was very rushed at this question - too much time on policy mix.
What I talked about.
1. Relative prices in the commodity sector
2. What affects relative prices (e.g. demand/supply from china)
3. Theoretical example (if commodity demands increased)
4. As such, the higher demand for commodities (iron-ore) would leave a shortage blah blah
5. price signals, reallocation, relative profits e.t.c
- I didn't talk about the credit to product exchange nature of a market which is where i think i messed up.
Then for the last section, i just talked about how Australia operates a market capitalist system with private ownership of most resources (e.g. 20% government and 80% left to the market), and what is produced is largely dictated by consumers (Consumer sovereignty)
Thanks a bunch.
I haven't actually seen the exam so hard for me to say
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What were some of the tricker questions?
If someone could type them up I can give you guys some rough solutions
rough replication of the questions
Essentially it was something like
Choose one factor that affects a particular market in the Australian economy (such as agricultural, commodity e.t.c), and the effect it has on the operations of the market. What type of market does Australia operate? (6 marks) -
Explain how a policy in the budget can increase participation rate in an economy, and how another policy can decrease long-term unemployment
(6 marks)
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Choose one factor that affects a particular market in the Australian economy (such as agricultural, commodity e.t.c), and the effect it has on the operations of the market. What type of market does Australia operate? (6 marks) -
Think it ended "to what extent does this market operate freely? not "what type of market does australia operate?"
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Likewise, (not exact replication)
Explain how a change in progressive income taxation, and how a change in company taxation, can affect AD and economic growth. (6 marks) - essentially this was fairly easy, however its vague nature is what stumped many people.
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Think it ended "to what extent does this market operate freely? not "what type of market does australia operate?"
I don't think it asked about the market you talked about, I think it was "to what extent do markets operate freely in Australia" no? If it was I missed it.
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Likewise, (not exact replication)
Explain how a change in progressive income taxation, and how a change in company taxation, can affect AD and economic growth. (6 marks) - essentially this was fairly easy, however its vague nature is what stumped many people.
It was effect on AS, which makes the progressive tax part a little trickier
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Choose one factor that affects a particular market in the Australian economy (such as agricultural, commodity e.t.c), and the effect it has on the operations of the market. To what extent does this market operate freely (6 marks)
Interesting question, not something you usually get. No right or wrong answers here. Higher scoring answers would discuss more aspects of the chosen market.
Some potential ideas:
- Choose market (e.g. commodity)
- Choose factor (e.g. China transition to consumption led growth)
- Explain factor: China transition -> less demand for commodities -> shift demand curve to the left & movement along supply curve to the left -> lower price, lower quantity. Supply side: lower prices -> less profitability -> reduce labour/capital & reallocate to other more profitable markets. Can rant on more in depth here for extra marks. Probably 2 marks here.
- Free market: Discuss level of FTAs/tarrifs/etc and impact on market. Can discuss globalisation & comparative advantages briefly (not the focus of the Q though). Probably 2 marks here.
- May want to discuss market failures if any (e.g. mining coal is a negative externality) -> minerals resource rent tax was implemented combat overproduction. Another 2 marks here.
Explain how a policy in the budget can increase participation rate in an economy, and how another policy can decrease long-term unemployment
(6 marks)
- Choose policy (e.g. reducing family tax benefits, or work-ready training programs)
- Explain how policy increases participation rate (e.g. reduce welfare -> less income -> incentive to find work -> increase participation rate) 3 marks
- Choose policy to decrease long term unemployment & explain (supply: skilled workers, demand: policy that increases AD in long run e.g. FTAs) 3 marks
- May want to highlight inverse relationship between unemployment and participation rate
Explain how a change in progressive income taxation, and how a change in company taxation, can affect AS and economic growth. (6 marks)
- Define progressive tax
- Define progressive income tax system (1 mark)
- Explain impact: more progressive tax system -> reduce incentive to work -> lower participation rate -> lower pool of labour resources & less skilled -> decrease AS -> decrease GDP (and higher inflation), (2 marks)
- Define company tax and briefly explain (1 mark)
- Explain impact: lower company tax -> higher profitability -> increase (I) -> expand operating capacity and increase demand for labour -> shift AS curve to right -> lower prices, higher quantity (good for SSE) (2 marks)
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Choose one factor that affects a particular market in the Australian economy (such as agricultural, commodity e.t.c), and the effect it has on the operations of the market. To what extent does this market operate freely (6 marks)
Interesting question, not something you usually get. No right or wrong answers here. Higher scoring answers would discuss more aspects of the chosen market.
Some potential ideas:
- Choose market (e.g. commodity)
- Choose factor (e.g. China transition to consumption led growth)
- Explain factor: China transition -> less demand for commodities -> shift demand curve to the left & movement along supply curve to the left -> lower price, lower quantity. Supply side: lower prices -> less profitability -> reduce labour/capital & reallocate to other more profitable markets. Can rant on more in depth here for extra marks. Probably 2 marks here.
- Free market: Discuss level of FTAs/tarrifs/etc and impact on market. Can discuss globalisation & comparative advantages briefly (not the focus of the Q though). Probably 2 marks here.
- May want to discuss market failures if any (e.g. mining coal is a negative externality) -> minerals resource rent tax was implemented combat overproduction. Another 2 marks here.
Explain how a policy in the budget can increase participation rate in an economy, and how another policy can decrease long-term unemployment
(6 marks)
- Choose policy (e.g. reducing family tax benefits, or work-ready training programs)
- Explain how policy increases participation rate (e.g. reduce welfare -> less income -> incentive to find work -> increase participation rate) 3 marks
- Choose policy to decrease long term unemployment & explain (supply: skilled workers, demand: policy that increases AD in long run e.g. FTAs) 3 marks
- May want to highlight inverse relationship between unemployment and participation rate
Explain how a change in progressive income taxation, and how a change in company taxation, can affect AS and economic growth. (6 marks)
- Define progressive tax
- Define progressive income tax system (1 mark)
- Explain impact: more progressive tax system -> reduce incentive to work -> lower participation rate -> lower pool of labour resources & less skilled -> decrease AS -> decrease GDP (and higher inflation), (2 marks)
- Define company tax and briefly explain (1 mark)
- Explain impact: lower company tax -> higher profitability -> increase (I) -> expand operating capacity and increase demand for labour -> shift AS curve to right -> lower prices, higher quantity (good for SSE) (2 marks)
Interesting, judging by your explanation for the individual market one, my answer of relative prices seems to be correct.
Im bagging my head for the PIT one (I thought it was incentives but I took a different path down the demand side) Is it still correct? I said a lower PIT system (e.g the current shift in PIT marginal tax rate in the 2nd highest tack bracket to 80,000 from 87,000 is effectively meant to exclude middle income earners). Then I went down the path of the more disposable income = more demand in certain industries around the economy and increased AS through increased perceptions of profitability and expansion of supply. (this is sort of that "cause and effect" error i feel.
Moreover, for the long-term unemployment one, I essentially talked about the 1.1. billion science/innovation agenda designed to reduce cost pressures overtime e.t.c. and how the increased innovation spurring from this policy will expand our productive capacity, and increase the willingness of future producers to supply in periods of higher demand due to industries (e.g. mining) will have lower machinery costs via an expanded productive capacity helping achieve lower inflation. Is this correct?
Thank you!
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Yep focus of PIT is supply side not demand side.
I'm not sure about the science one, because theoretically a higher productive capacity doesn't necessarily mean lower employment (though I guess you could argue it). So that one is a bit iffy.
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Yep focus of PIT is supply side not demand side.
I'm not sure about the science one, because theoretically a higher productive capacity doesn't necessarily mean lower employment (though I guess you could argue it). So that one is a bit iffy.
Rip PIT (you sure there's no way to sneak a mark there if you first talked about the demand side? because theoretically it is a demand side tax)
for the science one i said that decreased costs of production leads to willingness to expand and take up labour (sorry I didn't write that in my answer)
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hey I was wondering there was a question that was smth along the lines of why is the govt discussing changes to the taxation system/introducing taxation reform for 2 marks. A lot of people seemed to write about increasing progressive taxes to ensure more equitable distribution of income but I wrote abt increasing taxes to help return the budget to surplus ??? is that wrong? :/
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hey I was wondering there was a question that was smth along the lines of why is the govt discussing changes to the taxation system/introducing taxation reform for 2 marks. A lot of people seemed to write about increasing progressive taxes to ensure more equitable distribution of income but I wrote abt increasing taxes to help return the budget to surplus ??? is that wrong? :/
Yep both answers are fine, nothing to worry about
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Which of the following components of aggregate demand is the most unstable?
A. private investment expenditure
B. private consumption expenditure
C. government investment expenditure
D. government consumption expenditure
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Which of the following components of aggregate demand is the most unstable?
A. private investment expenditure
B. private consumption expenditure
C. government investment expenditure
D. government consumption expenditure
A
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I know y'all hate posts like this, but I'm rank 1-3 in a medium-strong cohort with around a 95% average for sacs (teacher is a VCAA assessor, so I think the SACs are pretty difficult)
I'm pretty sure I got 2 multiple choice questions wrong on that exam, and I'm also pretty sure I messed up that free market 6 marker. So I'm looking at around 80-83/90 for this exam. Last year's A+ cut off was 81.
Given the perceived difficulty of this exam, do I still have a chance at a 45? I know this is probably the stupidest question but I just need to have something to tide me over until ATAR day.
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I know y'all hate posts like this, but I'm rank 1-3 in a medium-strong cohort with around a 95% average for sacs (teacher is a VCAA assessor, so I think the SACs are pretty difficult)
I'm pretty sure I got 2 multiple choice questions wrong on that exam, and I'm also pretty sure I messed up that free market 6 marker. So I'm looking at around 80-83/90 for this exam. Last year's A+ cut off was 81.
Given the perceived difficulty of this exam, do I still have a chance at a 45? I know this is probably the stupidest question but I just need to have something to tide me over until ATAR day.
Assuming this year's cutoff is around 80/90:
80/90 would get you around 40
83/90 would get you around 43-44
As a guide, my year was around 78/90 cutoff and 84/90 got 47
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Does anyone have a copy of the exam?
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For the discussing change to the tax system, I talked about multinational firms evading taxes, culminating in the crackdown in the 2016-17 Budget.
Also for the market question, I talked about the supermarket market, with the one factor being climate conditions affecting the ability of farmers to produce stuff, which the supermarkets would then have to buy, and then went into a bit more detail from there. And with how freely it operates, I just talked about how it operates freely a lot of the time given the threat of government intervention, but that other times the duopoly of Coles and Woolworths would exercise market power and thus cause the market to not operate freely.
How screwed am I?
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For the discussing change to the tax system, I talked about multinational firms evading taxes, culminating in the crackdown in the 2016-17 Budget.
Also for the market question, I talked about the supermarket market, with the one factor being climate conditions affecting the ability of farmers to produce stuff, which the supermarkets would then have to buy, and then went into a bit more detail from there. And with how freely it operates, I just talked about how it operates freely a lot of the time given the threat of government intervention, but that other times the duopoly of Coles and Woolworths would exercise market power and thus cause the market to not operate freely.
How screwed am I?
Not screwed at all
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Hey guys, not to be that annoying student but I'm really really worried and stressed out I didn't get the score I wanted (mid A+ish) on the exam
Can someone please tell me what they think my mark was out of (x) for these questions!! :(
1. Q)The 6 marker of market operations
A) I know I screwed up parts of this question. All I did was essentially talk about relative prices in the iron ore market commodity market. Because its operations I thought i wanted direct reference to supply/demand e.t.c. So I said for example increased demand for iron ore from China to build their ships in periods of higher growth e.t.c would cause a shortage of cars at the present per unit price level. As such, prices will rise as consumers ration demand and suppliers will overtime supply more to the market to increased profitability (Essentially the price mechanism). Thereby arriving at a new equilibrium.
Then I made the mistake like many apparently and misread the question thinking it said to what extent do markets operate freely in Australia. I just discussed market capitalism e.t.c (I didn't discuss specific gov intervention in iron ore market - e.g. carbon tax).
Can you please tell me what I'm looking at for this question I really want to know its killing me
2. Q) the 2 marker taxation one with the statement discussing the reasons to have a tax reform.
A) I essentially just talked about how Australia still operates regressive taxes (e.g. tobacco excise) and then discussed the negative implications this has on equity e.t.c with proportionate incomes, gini coefficient e.t.c (I'm worried because Australia's taxation system is generally progressive, however is this still okay to talk about?)
3. I talked about youth jobs program twice. one time through one of the budget questions and another time in the last one asking how a budget can increase participation rates. However in one question I emphasised the wage subsidies of the policy, and for the participation rate one I emphasised the employability training and internship part saying it will help previously unskilled people enter the labour force and become attractive for employment and actively participate in the labour force e.t.c. Is this okay?
I'm positive I got 15/15 on the MC. However I really wanted around a 45. Is it still possible with this information I just gave you? (I know I also lost 3 marks on the 6 marker tax question)
THANK YOU VERY MUCH! :'( :D
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Hey guys this is another one of those annoying posts but i was really relying on a 40 (or just under) in economics to get the atar i need for my course, but I think I fucked over the exam.
For the 6 marker about markets, i left till last and mental blanked, and instead wrote about the market for coffee in a local area, the economic factor being changing consumer preferences influencing resource allocation and supply in certain areas, and how it was monopolistic competition which slightly limits its ability to operate freely in Australia. Is that completely off track? I think I got maybe 13/15 on MC, and probably lost a few other marks here and there.
And, for the 6 marker about income tax policies and company tax policies influencing AS, i could only think of how income tax policies influeced AD, which then can expand/contract AS, so i talked about that....
Rest was ok I think, and I've averaged about 90% on sacs this year in a pretty good cohort
Do I still have a chance at a 38-40 or am i a goner
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With the market operations 6 marker, I answered the question as if it was asking "to what extent is the market a perfectly competitive".
For the second half of the question, I said that the market is free to a limited extent and discussed high barriers to entry (high start up costs because manufacturing equipment), product differentiation (branding, perceived quality), and low number of firms that dominate the market. Then I made a short mention about how consumer sovereignty still exists and prices can still be low because of price wars. My last sentence was like "thus, the car industry is towards an oligopoly on the market power spectrum".
I mean, could this still technically be correct given that if market power exists, the market isn't 'free'. Barriers to entry can't exist in a free market, so would I be able to get at least some marks for the second half of the question??
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I would love to answer all of your questions but I'm in the same boat for that 6 marker. (left it till last and completely misread it) From my understanding you needed to discuss one factor, discuss how the market operates freely (in multiple ways).
For the PIT guy, I also made the same mistake aswell funnily enough, talked about how it influenced demand and later influenced supply. You needed to talk about how for example, higher PIT would reduce incentives to work and thereby reduce quantity of workers and decreased aggregate supply by basic supply-side logic. (less labour to work with)
I'm hoping that the A+ cutoff is lower this year (sounds like it will be).
cct98 , judging by the information you have provided I would say you have lost somewhere between 9-14 marks. This will land you a 38 raw at least so I wouldn't worry. I know how easy it is to get stressed especially when you work on a subject like economics all year and misread a question (exhibit A - me) and drop a few marks. I've come to the realisation that stressing about it is useless. The more we think about it the more we look for problems, and suddenly after I think I only lost 5 marks, i come to believe i've lost ten and so on. As hard as it is, try to let go.
Hope I helped.
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First two are correct (oil/housing/supermarket as welk maybe), however i highly disagree with you for a question 3, because its only a six marker, doing how a change means you would need to go through both sides (if they cut the tax for higher income or lower it for example) for both and that would be an 8 marker question. Also, there has been two changes in this year for both personal income and company tax which were very specific and it would only be going in one direction which gets rid of the assumption that would need to go through both sides if you assumed it your way and it explains how
So given only one direction
There has been change in the taxation system in 2016, personal income tax, company tax
Changes to personal income tax,etc (1)
Incentivise ppl to work, more access to resource, willing able to produce (1)
Increase in agrgeate supply and productive capacity, increase in growth in the long term(1)
Changes to the company tax,etc (1)
Reduced tax rate means businesses will invest more better capital new equipment increase productivity, willing able to produce (1)
Increase as,pc increase eco growth in the long term
100 percent sure this is the correct way to do it
Yep you would only do one direction for 6 marks. Given the way Q is worded, we can choose any direction (but obviously would be ideal to follow current policy).
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Alright good to know because i was going to do what you did but thought it wouldnt be appropriate for the mark allocation, however reading throught the wording of the question again it doesnt specifically say to use a budgetary policy like it usually would which means i could be wrong. Id think itd be extremely unfair to take marks off for that though consdering so many ways the question could have been interpreted for students, hopefully the assessors wont take six marks off from me because 'change' was far too vague and it doesnt explicity say yes/no to show show said 'change' in a general sense or a specific sense.
You are answering your own question lol. The "change" nature only wanted one change (Decrease/increase) - It was your luxury to choose.
When you say "reading through the wording of the question again", do you have an exam copy by any chance?
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Hey ABC, Could you still get 4/6 if your company tax part was perfect and you defined PIT and referenced a current example (Even if you discussed PIT from the demand side?)
Thanks
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No i dont, i was just reading what abcdq posted which made me think i was right in choosing one change but wrong in that i used a specific budgetary policy to answer it when the question didnt state it. But at the time when it said 'how a change' in the exam i immediately just went to what has changed the progressive (personal income tax) and compmay tax recently rather than in a general sense. Could anyone with past experience clarify if i would lose six marks there because now its bothering me that a general sense could have been correct too, and probably the better answer.
What do you mean you used a current budgetary policy? The question only wanted a change to the taxation system (e.g. a lift in the marginal income tax rate for the 2nd highest tax bracket from 80,000-87,000). If you are saying you wrote about WHAT changed the PIT system (i.e the current below trend growth perhaps signalling the need to stimulate the economy and create employment) - and referenced it with a specific budgetary policy. It unfortunately didn't want this, this is a "Cause and effect" error I made aswell by discussing the PIT bit from the demand side first.
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Hey ABC, Could you still get 4/6 if your company tax part was perfect and you defined PIT and referenced a current example (Even if you discussed PIT from the demand side?)
Thanks
Yep should be able to
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No i just did that, i didnt explain what prompted the pit system, i explained what it actually is which is a currecnt budgetary policy. However, when i think through it again i really do feel like how abcdq explained it was correct in that you needed to do a general sense of a change, not choosing a specific distrectionary one. This is because vcaa explicity states choose one budgetary policy to indicate this, so when it doesnt they are referring to just generally if the progresive tax were to be in more/less favour to higher income earners. So im assuming gonna be losing 3 or even six marks for misinterpretation which is honestly just annoying as
Even if you used a budgetary policy, as long as it relates to income tax and corporate tax I dont think you would lose any marks
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Hello,
Just wandering if using regressive taxes and referencing tobacco tax was okay for the "Tax system needs a reform" 2 mark question - I.e saying that it decreased equity e.t.c.
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If anyone has a copy of the paper or solutions can you please post it here!!!!!
Dying, literally.
Thanks!!
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I've got a copy. I'll see if I can put it up tomorrow.
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I've got a copy. I'll see if I can put it up tomorrow.
Thank you so much! Real MVP.
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Emailed
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would you be able to post the copy of the exam here please?