Economics Questions Thread

[Jono_CP]

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[Jono_CP]

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[Jono_CP]

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[Jono_CP]

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[millie96]

Are we allowed to use the carbon tax on the exam even though its abolished?

[jia0020]

Are we allowed to use the carbon tax on the exam even though its abolished?

Yes We Are. The Carbon Tax or the new Emissions Trading Scheme are allowed to be used because it is a form of Environment or Aggregate Supply Policy.

[Rachelle]

Can anyone inform me of any economic columnist for any newspaper? Or any individual who comments on the economy regularly? I know only a few, please tell me if you guys had anyone in mind! I'm really interested! Thanks in advance.

[Jono_CP]

No idea about this question from the 2013 Economics Exam:

"Describe the effect of a high Australian dollar on the goal of low inflation."

The examiners report suggests that the value of the dollar does not have a direct effect on purchasing power. Although, unless I am mistaken, it contradicts itself by stating that a "highly valued Australian dollar means the cost of local businesses importing goods and capital goods will be cheaper in terms of $AUD?"

[M_BONG]

No idea about this question from the 2013 Economics Exam:

"Describe the effect of a high Australian dollar on the goal of low inflation."

The examiners report suggests that the value of the dollar does not have a direct effect on purchasing power. Although, unless I am mistaken, it contradicts itself by stating that a "highly valued Australian dollar means the cost of local businesses importing goods and capital goods will be cheaper in terms of $AUD?"

Yeah but that's not a direct effect. It's only when the producers pass on the higher costs of production (cost inflation) onto the consumer that we experience inflation, so it's more so an indirect effect.

Other things you can talk about:

High AUD -> less demand from overseas on our exports (X) as they have reduced purchasing power, per unit of their currency. This reduces demand inflationary pressures, especially in an economy near productive capacity.

High AUD -> makes imports from overseas relatively cheaper for Australian producers. In the short term, this reduces cost inflation as costs of production should decrease. IN THE LONG TERM, productive capacity is expanded (as businesses invest more on capital goods and investment (I) from cheaper prices overseas), reducing demand inflation as productive capacity is expanded.

Also, remember to define or show an understanding of what the goal of low inflation is in your response to get full marks.

[Jono_CP]

Yeah but that's not a direct effect. It's only when the producers pass on the higher costs of production (cost inflation) onto the consumer that we experience inflation, so it's more so an indirect effect.

Other things you can talk about:

High AUD -> less demand from overseas on our exports (X) as they have reduced purchasing power, per unit of their currency. This reduces demand inflationary pressures, especially in an economy near productive capacity.

High AUD -> makes imports from overseas relatively cheaper for Australian producers. In the short term, this reduces cost inflation as costs of production should decrease. IN THE LONG TERM, productive capacity is expanded (as businesses invest more on capital goods and investment (I) from cheaper prices overseas), reducing demand inflation as productive capacity is expanded.

Also, remember to define or show an understanding of what the goal of low inflation is in your response to get full marks.

Makes sense! Thank you

[Jono_CP]

Can anyone identify and possibly explain a policy in relation to this question from the 2013 Economics Exam?

Explain one policy that has been used or might be used to promote the achievement of external stability

Thanks.

[millie96]

Can anyone identify and possibly explain a policy in relation to this question from the 2013 Economics Exam?

Explain one policy that has been used or might be used to promote the achievement of external stability

Thanks.

You could use an aggregate supply policy and talk about how efficiency gains result in increased exports, improving external stability by reducing the size of the CAD. E.g. trade lib, immigration etc.

How are people going about studying? Are you going over content first or doing prac exams? if so how many how you done/planing to do

[millie96]

Can someone please explain to me how a collapse in Australian commodity prices would decrease economic growth?

I would say that because demand for commodities are relatively inelastic it reduces Australian profits/incomes, but the answers say that commodities are elastic?
thanks

[Jono_CP]

What the hell does it mean on the examiners report based on the $A (which I seemingly do not understand at all as a concept) that "the better answers suggested that the effects of the depreciating $A meant that imports were relatively dearer?"

[abcdqdxD]

@Zeitegeist Means when the AUD falls, imports from overseas are more expensive