Economics Questions Thread

[chasej]

The carbon tax would be an appropriate environmental policy to use for this year's exam right?

Yes. I plan on using carbon tax myself.

[abcdqdxD]

Is it possible for the exam to force you to use the ETS instead of the carbon tax?

[chasej]

Is it possible for the exam to force you to use the ETS instead of the carbon tax?

I doubt it as the study design explicitly states you only need to know one environmental policy, in theory a student could have learnt something completly different from the carbon tax.

• how one environmental policy is designed to influence aggregate supply, long-term economic prosperity and living standards;

[abcdqdxD]

ahh ok cheers

[chasej]

Does anyone know of any good polices which worked to reduce unemployment and increase participation rate? As well as any designed to assist with external stability?

Thanks.

P.s. TWO WEEKS TOMORROW     I can't help but feel grossly underprepared even though I know I'm probably alright.

[sam.utute]

The carbon tax would be an appropriate environmental policy to use for this year's exam right?

Yep, definitely!

[sam.utute]

Does anyone know of any good polices which worked to reduce unemployment and increase participation rate? As well as any designed to assist with external stability?

Thanks.

P.s. TWO WEEKS TOMORROW     I can't help but feel grossly underprepared even though I know I'm probably alright.

Any upskilling programs and training for workers will help.

The government rarely has initiatives specifically designed to help external stability, but you could probably just talk about any policy that improves export conditions.

[abcdqdxD]

I was quite puzzled when I did this question. Although I got it right, I wasn't 100% sure of my answer.

The removal of tariff protection is likely to improve which of the following policy goals?
A) Allocative efficiency
B) Full employment
C) External stability
D) Equity in the distribution of income

My gut instinct was A because micro reform is targeted at improving efficiency, but as a by-product of efficiency gains, external stability is also improved. The fact that the question had the word "goal" implied that it was one of the 5 economic goals, which allocative efficiency clearly isn't. What do you think? This was on VCAA 2010 and the correct answer is A.

[chasej]

I was quite puzzled when I did this question. Although I got it right, I wasn't 100% sure of my answer.

The removal of tariff protection is likely to improve which of the following policy goals?
A) Allocative efficiency
B) Full employment
C) External stability
D) Equity in the distribution of income

My gut instinct was A because micro reform is targeted at improving efficiency, but as a by-product of efficiency gains, external stability is also improved. The fact that the question had the word "goal" implied that it was one of the 5 economic goals, which allocative efficiency clearly isn't. What do you think? This was on VCAA 2010 and the correct answer is A.

Definitely one of the harder questions like you said.

I think the key word is "policy goals" it is my understanding that a policy goal isn't necessarily an economic goal that was studied in U3 AOS2 for example budgetary policy can be used to target allocative efficiency by reallocating resources.

Trade liberalisation (I didn't do TL in U4 as a MRP, only in U3 AOS2 so my knowledge isn't that detailed) is done in order to cause Australian industry to reallocate resources into areas which Australia is most efficient, thus the main policy goal (not necessarily an economic goal) is allocative efficiency, obviously once resources are allocated efficiently the economic goals are likely to follow but the first effect is greater allocative efficiency.

[abcdqdxD]

Ah yes fair enough. Cheers

[abcdqdxD]

Do we have to know BOTH the GPI and MAP?

The SD states:

limitations of GDP and alternative measures of living standards, including Genuine Progress
Indicator (GPI) and Measuring Australia’s Progress (MAP)

Does the word "and" imply we need to know both?

[chasej]

Do we have to know BOTH the GPI and MAP?

The SD states:

limitations of GDP and alternative measures of living standards, including Genuine Progress
Indicator (GPI) and Measuring Australia’s Progress (MAP)

Does the word "and" imply we need to know both?

Yes, you need to know both according to study design. I doubt they would ask a question that requires you to know both but probably better not to take the risk (i.e. in previous years they asked "Explain how GPI or MAP can.....") You don't really need to know much for them so probably worth learning both.

Less related, but if they ever ask a question asking either or; it's probably better to go with MAP as there's less similarities with GDP, so more differences to talk about.

[abcdqdxD]

I would probably go with GPI because its much easier to explain. Personal preference really..

[sam.utute]

Yes, you need to know both according to study design. I doubt they would ask a question that requires you to know both but probably better not to take the risk (i.e. in previous years they asked "Explain how GPI or MAP can.....") You don't really need to know much for them so probably worth learning both.

Less related, but if they ever ask a question asking either or; it's probably better to go with MAP as there's less similarities with GDP, so more differences to talk about.

You DON'T need to know both in detail. I pretty much ignored MAP and focused on GPI because it has less content and is much easier to explain. I would recommend you pick ONE of them and learn it inside out, and have a cursory knowledge of the other one.

I would probably go with GPI because its much easier to explain. Personal preference really..

Good choice! Easiest one IMO.

[chasej]

Question 4 from url=http://engageeducation.org.au/engagedownloads/Practice%20Exams/2011/Economics/Units%203%20and%204/Exam.pdf/]this paper[/url]

Which of the following factors is not an aggregate demand factor affecting economic activity?
A. an increase in the company tax rate
B. an increase in interest rates
C. an increase in production costs
D. an increase in the amount of disposable income.

Answer to paper says the answer is C. I think however both A and C are exclusively supply factors, thereby the writer of the paper made a mistake. Am I correct or is there a way company tax affects AD?