HSC Economics Question Thread

[birdwing341]

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)

That's kind of different to the way I've learnt it. I thought improvements in technology would be counted under technical efficiency, because they help increase the firm's output for a set amount of inputs.

I thought dynamic efficiency measured the ability of a firm to react to the changing pattern of consumer demand. In order to influence this, microeconomic reform can encourage innovation, which allows firms to develop new goods more quickly. It's all about the time taken, so if firms are able to respond to technological changes by becoming innovative, they'll improve dynamic efficiency.

There's not too much micro can do here (other than maybe for PTEs where they can privatise)...

[hermansia12]

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?

Haha I just picked up that my spell check changed micro to macro. In my first post.

Sorry I'm a little rusty on my efficiency definitions because I haven't used it in a while. Go with the one you are taught although I do find it strange that the one online is a little different. http://www.businessdictionary.com/definition/dynamic-efficiency.html
In that case microeconomic policies ensures that the economy will be more efficient in more than one industry. This means that it's not reliant on that one industry so that even if the demand for that specific industry falls (e.g mining). Therefore the economy is less volatile as there will still be other industries to fall back on.

[Giraffes are tall]

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

[itsAnuu]

List of graphs we need to know for tmrw please

[itsAnuu]

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

Times the expenditure group in percent (i.e. 30 for food would be 0.3) by the change in CPI from the base year. The highest value when you do all corresponds to the highest contributing

[Giraffes are tall]

List of graphs we need to know for tmrw please

From the top of my head, there's:
-Short and long run Phillip's Curve
-Lorenz Curve
-J Curve
-PPF curve
-General supply and demand graphs

Hope this helps

[hermansia12]

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

I have never seen a question of that type ask you anything more than greatest contributor to CPI. However this is a more in depth analysis into questions of that type:

It can be used to find the weighted average of the prices of the basket of goods used to measure inflation.

Using the 2010 paper's table, the weighted average of prices would be:
(0.3*110)+(0.1*130)+(0.15*125)+(0.2*120)

Then 100*weighted average current/weighted average base year ( usually the previous year) will give the CPI. It will give an indication on the purchasing power of consumers

[hermansia12]

List of graphs we need to know for tmrw please

This question has come up quite a few times.
-shifts in supply and demand (includes exchange rate graphs)
-Gini Coefficient from the Lorenz curve
-tariff, subsidy, quota graphs
-phillips curve (inverse relationship with unemployment and inflation)

This would be the minimum I would say.
Hope this helps

[Giraffes are tall]

"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

[itsAnuu]

"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...

[nimasha.w]

hi why is this A and not C

[MagmaMeerkat]

hi why is this A and not C

Hi Nimasha.w

I believe the answer would be A, because when more foreign assets are demanded, domestic companies need to pay for these assets in foreign currency, thus exchanging $A for $foreign, and as a result increasing the supply of $A available in the money market.
Hope that makes sense haha

[hermansia12]

"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 there

Here is a potential plan of what you could write about with regards to this essay:

Macroeconomic policies affect the economy as a whole -> Fiscal and Monetary

Inflation needs to be in target band of 2-3% for sustainable economic growth.This can be done through monetary policy (selling and buying of government securities). However, monetary policy has been relatively ineffective in recent years so must turn towards fiscal policy.

Governments use taxation (Leakage) and expenditure (injections). Expansionary stance (more injections than leakages) will increase economic growth which will lead to an increased demand for labour (as aggregate demand increases). This will decrease unemployment as cyclical unemployment decreases. Producers may wish to take advantage of the increased propensity to spend raising prices causing inflation

Retraining programs is a fiscal policy -> helps decrease structural unemployment

Allocating spending in the budget on infrastructure will lead to long term economic growth as productivity increases. Increase job creation -> decrease unemployment

[hermansia12]

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...

Hahaha that is some really scary coincidence! Channelling the Pre- economics exam halloween spookiness

[AFix]

"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

Fiscal [Inflation]
-  Automatic stabilizers -> counter-cyclical role in reducing aggregate demand when inflationary pressures may be high through increasing tax on higher end of income bracket

Fiscal [Unemployment]
-  Government expenditure on employment programs etc - like the new Youth PaTH Plus program
-  Gov exp on childcare subsidies to promote more couple households into entering the workforce

Monetary [Inflation]
-  Tightening MP will reduce access to cheap funds for consumption/investment by households and businesses -> This will reduce the level of AD in the economy -> reduction in AD will reduce inflationary pressures as demand for goods will increase -> will hold back inflation


Monetary [Unemployment]
-  Expansionary MP will increase AD in the economy -> Increase in AD will stimulate increased production -> Will lead to firms demanding more labor in order to produce these goods -> will stimulate employment in the economy
However (can link to inflation), increased spending in the economy may result in firms increasing prices as they think they will get more profits by exploiting this demand -> increase in prices may be accompanied by wage pressures by employees as they find their wages are not rising as fast as prices -> can talk about the whole 'wage-price spiral' concept


TBH This is just random stuff, does anyone actually have a good way to approach this?