Official Economics Exam Discussion

[paully08]

everyone said participation rate but that would increase unemployment in the short term, and u can still have growth without increased participation rate, i.e. jobless growth so i don't see why it's right

exactly! and if you think about the real economy, the participation slightly decreased this year, not increased.

[champorado]

It's a theory question. Are you saying that when an economy is continuously growing that there isn't even the slightest possibility that it might use more labour resources?

[marbs]

they said a policy between 2005 and 2008, and it was announced. So it should be right. Hopefully

[darcyallen]

everyone said participation rate but that would increase unemployment in the short term, and u can still have growth without increased participation rate, i.e. jobless growth so i don't see why it's right

exactly! and if you think about the real economy, the participation slightly decreased this year, not increased.

It was theory -
If the participation rate increased (without growth would cause an increase in unemployment) while there was strong growth (that would caused a decrease in unemployment) - it is in theory possible for the unemployment rate to remain to 4%.

ie. As the economy grows the unemployment rate falls, but the increase in participation acts to cancel this out.

[AppleXY]

the main problem in Australia is a skilled labour shortage. Or structural unemployment.

And look at the stats we have like 65.1% participation. Thus an increase in participation (the workforce as a % of the pop)  will not necessarily affect UN. 

[darcyallen]

the main problem in Australia is a skilled labour shortage. Or structural unemployment.

And look at the stats we have like 65.1% participation. Thus an increase in participation (the workforce as a % of the pop)  will not necessarily affect UN. 

this question wasn't aimed at the current economy.
it was simply theory.

theory never exists exactly in nature - as otherwise we would all have to be robots.

but the fact is, the answer about the participation rate, is certainly correct.

[Collin Li]

theory never exists exactly in nature - as otherwise we would all have to be robots.

Depends how flexible the theory is, but yes, macroeconomics makes some pretty unrealistic assumptions about humans. Microeconomics is a much more successful in practice, because the theory is actually closer to reality.

[yalnif]

I found the exam to be quite good. Not too hard, not too easy. I know I made one mistake for sure though. For the market failure question I incorrectly referred to the defence force as a merit good not a public good! Was kicking myself afterwards. Hope I only lose 1 mark for that... :s Hoping for 80+ out of 90. With the multiple choice question on the unemployment rate, the answer was definitely the one about the participation rate. All the other answers were factors that would increase the rate of unemployment, regardless of rising economic activity. The participation rate was the only thing there that would explain a stagnant unemployment figure coupled with simultaneously rising economic activity. The question was purely theoretical...

[Julian H]

What do people think of this, i know one guy for market failure put the production of illicit drugs. There is no doubting that there are willing suppliers and sufficient demand, however as the government sees it as undesirable production, there are a range of interventions such as laws which limit/stop production, thus market mechanism is unable to efficiently allocate drugs which are desired by population which is market failure. Personally am not sure about it but after thinking bout it, it actually sounds quite correct. What do you guys think?

[darcyallen]

What do people think of this, i know one guy for market failure put the production of illicit drugs. There is no doubting that there are willing suppliers and sufficient demand, however as the government sees it as undesirable production, there are a range of interventions such as laws which limit/stop production, thus market mechanism is unable to efficiently allocate drugs which are desired by population which is market failure. Personally am not sure about it but after thinking bout it, it actually sounds quite correct. What do you guys think?

i've actually thought about this before!
just because it's not morally correct - doesn't mean it isn't a market failure. and who says the Government's morals are right anyway?

But then again... is it a government failure... or a market failure?
The market would allocate these resources quite efficiently without Govt. intervention.

[darcyallen]

theory never exists exactly in nature - as otherwise we would all have to be robots.

Depends how flexible the theory is, but yes, macroeconomics makes some pretty unrealistic assumptions about humans. Microeconomics is a much more successful in practice, because the theory is actually closer to reality.

Yeah, that's true.
We always have to make assumptions, or have some predictability, about how we act, or the whole point of policy would be a lost cause, basically...

But, I agree, macro policy makes unrealistic assumptions, but microeconomic policy is much more successful.

[cobby]

has anyone put the exam on the internet? i want to check my answers with romeo's answers

how would anyone have it?, you have to hand up your answer booklet

[Mark]

^Teachers are given spare copies.

[cobby]

^Teachers are given spare copies.

whoa i didnt know that, im gonna see if i can hunt my eco teacher down for a spare one!!

[darcyallen]

this forum has died.
everyone is over it.

haha


just chill until december 15th

goodluck
(everyone says that... but not really...) haha.