VCE Stuff > VCE Economics
End of year exam
marbs:
me and my mate went through this neap 2008 practice exam, and there was this multiple choice we'd never seen. It went something like;
It the government made a limit on the highest possible value of houses this would cause
a) More demand, thus causing a shortage
b) less demand causing a surplus
c) The equilibrium price would move down
d) ...?
I said A, but my mate said C
Has anyone seen something like this, and would did they get.
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Also Really easy question that I couldn't think of.
If interest increased what effect would this have on price stability
I said interest rates would lead to lower confidence, thus decreasing consumption spending, lower agg demand, slowing eco activity, and thus slow growth. Which will slow down inflation, and thus aids price stability by keeping prices in the target range of 2-3%.
I then said interest rates would slow investment.. (continued with similar answer) :idiot2:
What I am missing?
ReVeL:
I dunno, but couldn't it also increase production costs of firms that have borrowed money?
This could cause firms to raise prices to protect profits, hence adding to cost inflation, and jeapordising price stability. However, this is probably minimal compared to slower demand and would most likely be insignificant.
Meh.
costargh:
--- Quote from: marbs on October 02, 2008, 09:04:38 pm ---me and my mate went through this neap 2008 practice exam, and there was this multiple choice we'd never seen. It went something like;
It the government made a limit on the highest possible value of houses this would cause
a) More demand, thus causing a shortage
b) less demand causing a surplus
c) The equilibrium price would move down
d) ...?
I said A, but my mate said C
Has anyone seen something like this, and would did they get.
----------------------------------------------------------------------------------------------------------------
--- End quote ---
Um... do you know the answer? Do you know what d) is?
If d) was
the equilibrium price would move up, id choose that. hahah
problee wrong
marbs:
lol nah I don't remember what it was, it wasn't that, and I'm pretty sure it wasn't right.
@revel - thanks thats another effect
costargh:
There is no reason why the equilibrium price would move down and def no surplus of houses.
its a or d
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