HSC Economics Question Thread

[jamonwindeyer]

Is making notes suggested or is understanding the textbook enough in studying for an exam?

Didn't do Economics, but I'd imagine understanding the textbook is enough! Notes are basically just a way of synthesising information into something easier to digest!

You could even just download some of the stuff in our free notes section and use that? I can't remember if there is much for Eco but it could be of help?

[yvette.rosa]

Tips on extended responses, particularly in regards to structure?

Just some things that helped for me:
Before writing an extended response, take note of what verb is being used in the question. You can not write an effective response without addressing the verb - and this is true for all subjects. I also find that making a plan about how you're going to structure your essay helps a lot in making a cohesive and logical response which is of upmost importance in economics.

What I like to do with the question is make the key terms that I need to address in red, so it's clear to me what the question is asking me to write about. Also while i'm writing the essay I make sure the key terms are red too just so I know that i'm answering the question.

In your introduction, ensure that you answer the question by having a thesis. Also introduce to the reader what your main points are that you're going to be talking about in your body.
Sometimes, depending on the question, you might have a second "introduction" paragraph. This is where you can define key terms.

In your body paragraphs, just follow the general TEEL structure and that whenever you have economic terms relating to the question make sure you define it after stating it.

[asd987]

Hi, how would I calculate this:

the answer is B btw.

[kiwiberry]

Hi, how would I calculate this:

the answer is B btw.

The balance on current account =  500 - 540 - 70 -115 + 85 = -140 (net income is the old name for net primary income and net current transfers is the old name for net secondary income)

Because current account + capital/financial account = 0, there must be a surplus of $140 billion on the capital and financial account, so B is the answer

[isaacdelatorre]

Hey everyone,

Really sorry that i've been so inactive recently, started uni - trying to figure out wtf I'm doing as well as just coming back from camp where there was 0 reception.

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.

Hey Chloe,

I asked this same question last year and was super ocnfused about it - but the way to sort of get around this is to realise tha tmany things are happening in the world at each point in time. It isn't as simple as 'x' leads to 'y' and this leads to 'z' because m happens. It's more like 'z' happens because 'x' and 'y' are both occurring but 'f' is also affecting it contradictorily.

This is the answer an amazing economics student gave me last year when I asked him - sorry for the weird formatting but it was over facebook.

"Lower terms of trade at 81 means that we are receiving lower prices for exports than imports.  Hence export revenue has declined despite the fact that our depreciating aud has bolstered the ic of our tradeable sector.
More importantly the bogs reflects how we no longer produce consumer goods due to the hollowing out of our manufacturing sector as we can not compete with the low cost producers in the industrialist ng economies of China
Further we are heavily reliant on importing capital equipment e.g. from america
This is why our bogs has dipped into a deficit
Why is it higher than the npi
Well global ir are low due to slow global economic growth with many of the advanced economies having 0 or 1 percent economic growth
E.g. America cash rate us only 0.5 percent
Interest payments on our foreign debt is thus much lower. Interest payments make up the bulk of our npi
Hence it's been lower"

Hope this helps you

What are the effects of a depreciation/appreciation on the Australian government?

Hmm, that's a tough one because there is no explicit effect on the Australian government. But off the top of my head, the Australian government is definitely affected in the way that they would have to use macro and micro economic policies in order to curb the effects of exchange rate fluctuations on the rest of the economy. E.g. an appreciation of the AUD would make exports less internationally competitive, the gov could (aside from affecting the exchange rate themselves) incentivise export programs such as Austrade as well as offering grants to specific industries or businesses in order to foster innovation which could increase productivity/efficiency and cause a decrease in the cost of production which can make exports more internationally  competitive. Other examples do exist and maybe you could have a think about how the government could use policies to curb the effects of exchange rate fluctuations on other parts of the economy; or in response to other effects of fluctuations.

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. 

Hey sjzorilla7,

well i definitely can't say there is a right or wrong way to structure it because in reality there is a billion ways you could structure it.
what are your current ideas for the effects of protection on economic growth and development. Are you talking about just Australia, or different countries, or the global economy? Structuring it by type of protection is definitely one way you could do it as it lends itself easily to examples - e.g. this specific tariff caused a decrease in exports and thus a decrease in AD and then decrease in GDP thus decrease in economic growth

Hope this helps

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?

Hey there,

I would never go into an exam with prepared essays - however instead i would go into the exam with plans and statistics/trends that could lend themselves to each question and topic. Since you have 4 possible questions, you could definitely plan out each structure with each example and statistic/trend you would use for each. and then I would rewrite each plan a few times so you knew exactly what you would say for each. When you go into the exam and see the question, you have a really good indication of the direction you're going without knowing it word for word (i highly recommend against this for economics). If you can't really remember statistics very well.. What i did was I drew a business cycle diagram since 1990 and for each section, 1990, pre gfc, gfc, post gfc, current - i would have the stat for each topic in a different colour and drew this diagram out 7 times before the hsc (the day before because i procrastinated) - that's how i would go about remembering the points of your essay

hope this helps

How exactly do you calculate this?

Hey there,

so this is how i'm assuming there are doing it

GDP = Consumption + Investment + Government + Exports - Imports
600 = 420 + 60 + 90 + X - 10
50 = X

Since exports equals 40 and imports equals 10 - the balance on goods and services equals 30 which would result in a $30 surplus.

Is making notes suggested or is understanding the textbook enough in studying for an exam?

Hey there,

I am of the opinion that there is no one correct way to study. You have to find the way that suits you the best. For some that involves making notes, using flash cards, highlighters, memorising, past papers, saying things aloud there are a million and one ways to study. So if you think notes is good for you then go with that - however if you think that you are fully comfortable just reading the textbook and being able to recite the concepts/ideas/cause and effect then by all means go for that. If you are totally lost, then the best way is to read the textbook, highlight the main points and then summarise them into your own notes --> advocate this definitely.


Hope this helps

[chloe9756]

How does expectations of increases in US interest rates affect Australian exchange rates and balance of payments?

[K9810]

Hi,

Was just wandering, is there a diagram for a revaluation of the $A?

[caitlinjovanovska]

Does anyone know an easier-ish way to remember whether factors cause the AUD to appreciate/depreciate?
Thanks!

[K9810]

Hi,

What is the difference between the net secondary income in the current account and the capital transfers in the capital account?

[soha.rizvi1]

HI,

Just had a question ? what factors determine the appreciation and depreciation of the exchange rate?


thanks

[Vinnnnnnyyyyyy]

How exactly do you calculate this?

Is the answer B? I would assume since it's asking for the current account balance you would just need to find the difference between exports and imports since goods and services go under the CA. So just by doing simple maths, the X would be $40. Since imports are negatives: 40 - 10 = $30 surplus.

[ciaradoyle00]

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?

[carolinewang206]

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?

If that is the question I'd assume it means an increase in GLOBAL interest rates in general and not just those of the australian economy unless it specifies an increase in australian interest rates.

If its referring to global interest rates-
- Higher interest rates will lead to an increase of the debt-servicing ratio hence increasing what needs to be payed back on australian loans worsening the NPY account and the CAD
- Increased interest rates will lead to higher savings, hence increasing leakages from the economy and causing a contraction in the economy
- Increased interest rates increases the repayments on individual loans, hence increasing loan repayments and decreasing disposable income, leading to less consumption and decreasing AD
-Increased interest rates overseas relative to AUS would lead australian consumers to place their savings in overseas accounts--> increases supply of funds --> depreciation of AUD

if referring to Australian-
- make sure you specify that its investment in australian banks, --> link to how this increases savings in the economy, allows more potential for investment by filling savings & investment gap- hence less borrowing, less debt repayments and improvement of NPY deficit and CAD
- increased savings from overseas- increased demand of AUD, appreciation
-  increased savings, hence increased MPS, lower MPC, decreases AD and causes a contraction
- increased loan repayments, less disposable income, less consumption, again decreasing AD and causing a contraction in the economy

hope this helps! xx

[Vinnnnnnyyyyyy]

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?

[emmacmeyer]

Service costs are in other words interest repayments. Australia must not only repay financial investments but interest ontop of these investments. Interest is found in the net primary income account of the current account