2016 Economics Exam Discussion

[abcdqdxD]

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

[Knarf]

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.

[100.00]

MC was a breeze.

2 short answer questions were fairly odd. (both 6 markers).

A+ cut off predictions??

[dumacat]

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

[garytheasian]

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.

[100.00]

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.

[dumacat]

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

[corza000]

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?

[100.00]

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.

[dave101]

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

[abcdqdxD]

What were some of the tricker questions?

If someone could type them up I can give you guys some rough solutions

[abcdqdxD]

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

[100.00]

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)

[dumacat]

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?"

[100.00]

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.