Economics Questions Thread

[Hutchoo]

Seriously, I don't understand these stupid ambiguous questions from VCAA.
Question 4, 2010: http://www.vcaa.vic.edu.au/vcaa/vce/studies/economics/pastexams/2010/2010economics-w.pdf
What the fuck is "different"? LIKE WAIHWWDJSCIUJ21.

The answer is C, so don't bother looking up accessors reports.
Please explain this concept of "different" to me, because I always get the MC question wrong when it talks about "different than the other 3" and it pisses me off :@

[Saur11]

a. Increase in indirect tax - this raises inflation as it is first felt by suppliers who generally opt to pass on these increases in cost of production as higher prices, creating cost inflation.
b. depreciation AUD - generally makes necessary imported inputs more difficult to obtain for Australian business, reduces technial efficiency and AS - upwards pressure on prices meaning cost inflation.
c. an increase in labour productivity - means given labour inputs are being used for efficiently, producing more. Increase in AS less cost inflation.
d. increase in energy costs - same as the first one -increase in cost inflation.

So, A,B and D all increase cost inflation, meaning C is the only logical answer.
Hope it is helpful

[BigFunt]

I don't think its ambiguous at all
i
t just means that 3 of them have a similar effect and the other one will do something different to the other 3

most likely it will be positive vs negative i.e with external stab. one will be improving whilst the other three will be worsening.

im not quite sure why they are "stupid" and "ambiguous"

[TrueTears]

from a conventional point of view, that questions is fucking ambiguous, "different", i can define different in an economic and financial context in so many ways, ie, different as in through which channel the inflation comes from or what type of inflation it is or how the inflation is measured etc etc

shit vce eco is shit

[Hutchoo]

http://www.rba.gov.au/


Cash rate is now at 4.5%!
This means that the policy mix is conflicting, YO.

[BigFunt]

i was told we could still say that 4.5 is mildly restrictive

thoughts?

[Hutchoo]

i was told we could still say that 4.5 is mildly restrictive

thoughts?

When you say 'mildy restrictive' are you talking about restrictive towards BP's goals 0-o or as in IR's at 4.5% are contractionary/restrict eco growth?

[BigFunt]

yeah restrictive in the sense that they still can be considered contractionary, to eco growth

[chemkid_23]

http://www.rba.gov.au/


Cash rate is now at 4.5%!
This means that the policy mix is conflicting, YO.

how so? and do we mention it in exam to show off?

[BigFunt]

i don't think the policy mix is conflicting.

[chrisjb]

i don't think the policy mix is conflicting.

me either. I'd say that BP is contractionary with a view to becoming fairly neutral over the next two years and MP is simply neutral. They're taking a 'wait and see' approach imo. BUT if you listen to some of the economists talking on news24, they're saying that they're EXPECTING the rba to continue to cut rates through next year which would represent a conflicting stance... but i'm not convinced.

[Hutchoo]

I do see it as somewhat conflicting. I mean, if the IR's are cut down to a more expansionary stance, but is viewed as 'neutral' by the RBA's standards... and the government wants to reduce the deficit (run a surplus budget) by 2012, isn't that a bit conflicting?
Not only that, but even if the IR's are neutral, that means that it is conflicting in a way because it isn't allowing the full potential of Budgetary policy to achieve it's goals (surplus budget)?

[BigFunt]

I see a neutral stance as niether hindering nor promoting eco. growth and shit.

Hence they the current policy mix, is niether complementary nor conflicting.

In the exam, I will talk about how for the majority of the year, it was complementary, however because of recent factors, shits changed.

[Hutchoo]

ARGHHHHH. We need Sam to help us xD.

[chrisjb]

I do see it as somewhat conflicting. I mean, if the IR's are cut down to a more expansionary stance, but is viewed as 'neutral' by the RBA's standards... and the government wants to reduce the deficit (run a surplus budget) by 2012, isn't that a bit conflicting?
Not only that, but even if the IR's are neutral, that means that it is conflicting in a way because it isn't allowing the full potential of Budgetary policy to achieve it's goals (surplus budget)?

I see your point. The RBA made an expansionary move while treasury is making a contractionary move.. I suppose in my head I was thinking that it's impossible to have a conflicting stance to neutral... But you've convinced me actually. In the shortest of time frames it is a conflicting stance, but we'll have to wait until well after the exam to see if this is a one off occurrence (which I suspect) or whether it is indicative of a longer term expansionary mindset of the RBA.