Economics game (1 Viewer)

[ONoezzz]

Instructions:
1. Answer the question above your post.
2. Post another question.

Vamanos!

Calculate the simple multiplier for an economy in which the MPS = 0.8.

 

[danal353]

1/mps = 1/0.8 = 1.25


edit : Outline one social cost and one economic benefit of income inequality

 

[ONoezzz]

Social cost: social class divisions (upper class, middle class, lower class), poverty
Economic benefit: encourages increases in education and skills.

Btw, for the first question: the question stated MPS, not MPC. So the formula you should use is 1/MPS, not 1/1-MPC.

k = 1/0.8
= 1.25

Identify and describe two causes of inflation.

 

[ayehann]

Identify and describe the two causes of inflation.

Demand Pull Inflation - Occurs when there is excessive demand in the economy and supply cannot increase, the prices tend to rise as consumers bid up the prices.
Cost Push - If costs for a business rise, they will increase sale prices to maintain profit levels, resulting in higher prices for the consumer.

How does an appreciation in the exchange rate impact on the balance of payments?

 

[danal353]

Social cost: social class divisions (upper class, middle class, lower class), poverty
Economic benefit: encourages increases in education and skills.

Btw, for the first question: the question stated MPS, not MPC. So the formula you should use is 1/MPS, not 1/1-MPC.

k = 1/0.8
= 1.25

Identify and describe the two causes of inflation.

haha yeah I noticed that - fixed!

Demand pull inflation - where excess demand outstrips supply, hence driving up prices

cost-push inflation - where increases in costs for the factors of production (e.g. labour) increases and hence the cost is passed on to the consumer through higher final prices

There is also - imported inflation (higher costs of imported inputs) and inflationary expectations (where people expect prices to go up in the future, hence they buy now - excess demand - inflation)

 

[ONoezzz]

How does an appreciation in the exchange rate impact on the balance of payments?

Appreciation refers to the rise in the value of the domestic currency against other foreign currencies. An appreciation would encourage domestic spending on foreign goods (as foreign goods are cheaper with a stronger currency) and discourage domestic exports (because the exports are more expensive and less attractive than other countries' exports). This would increase the goods debits and decrease the goods credits recorded in the Current Account Balance, leading to a Current Account Deficit as part of the Balance of Payments.

Outline the implications for Australia of protectionist policies of other countries and international organisations.

 

[qaz0981]

Appreciation refers to the rise in the value of the domestic currency against other foreign currencies. An appreciation would encourage domestic spending on foreign goods (as foreign goods are cheaper with a stronger currency) and discourage domestic exports (because the exports are more expensive and less attractive than other countries' exports). This would increase the goods debits and decrease the goods credits recorded in the Current Account Balance, leading to a Current Account Deficit as part of the Balance of Payments.

also, the ausralian dollar value of our overseas debts would decrease if the debts are in foreign currency terms (and thereforce the cad would decrease), although there has been a movement towards loans in australian dollar ammounts.

 

[ONoezzz]

also, the ausralian dollar value of our overseas debts would decrease if the debts are in foreign currency terms (and thereforce the cad would decrease), although there has been a movement towards loans in australian dollar ammounts.

Thanks for adding that in

Just the latest question again, if you couldn't see it:
Outline the implications for Australia of protectionist policies of other countries and international organisations.

 

[qaz0981]

Thanks for adding that in

Just the latest question again, if you couldn't see it:
Outline the implications for Australia of protectionist policies of other countries and international organisations.

no problem i've finally worked cad out, it was my least favourite topic all year.

to your question:
although there has been a huge shift towards free trade with the effect of globalisation, protectinist policies still remain, however their greatest impacts are evident in the profits of a move towards free trade. when a free trade agreement was established with the USA, the value of australia's aluminium exports rose by 11.4% in one year. prior to this free trade agreement, the USA's protection by the use of tariffs on australia's magnesium and titanium was 8% and 15% respectively. protectionist policies of other nations disallow optimal resource efficiency and allocation to maximised.
protectionist policies of other nations can also make it harder for infant industries to establish themselves, and generally do not allow australia to achieve its maximum export capacity.
(bit of a round about answer..? haha)
edit: and of course the effect on the bop haha


next question:
explain how fiscal policy could be used by a government to reduce a deficit on the current account.

 

[~caramello~]

next question:
explain how fiscal policy could be used by a government to reduce a deficit on the current account.

The government can run budget surpluses to reduce a deficit on the current account. By increasing taxation more than spending, the government can then use this to fund and reduce the deficit acquired.

Question: Explain how movements in Australia's Exchange rate affect the level of foreign investment in Australia.

 

[P.T.F.E]

When the AUD appreciates against global currenies, it appears more attractive in foriegn markets as it will generate a higher level of return. As a result, foriegn investment will increase and financial flows flood into the financial market. However, the converse is also true. If the AUD depricates against global currencies, it will appear less attractive and thus reduce the level of foriegn investment in Australia.

Question:
Describe the impacts of Keating's Prices and Incomes Accord in influcencing employment and work practises.

WRONG haha

 

[Zak Ambrose]

a suggestion. could we possible give this game some structure by systematically going through each dot point of the syllabus, because this is the only study im doing.

define GWP and "the global economy"

 

[Leo Vanguard]

GWP, or Gross World Product is the sum of the total output of goods and services by all economies in the world during a specific time period.

The global economy is the world economy. It includes all production, trade, finanical flows, investment, technology, labour and economic behaviour in nations and between nations.

Question: Define the foreign exchange market and explain who are the main participants in foreign exchange markets.

 

[brades]

a suggestion. could we possible give this game some structure by systematically going through each dot point of the syllabus, because this is the only study im doing.

define GWP and "the global economy"

GWP is measured by totalling all GDP estimates for each country. All the countries in the world who produce good and services contribute to gross world product.

The global economy consists of all countries in the world that produce goods and services and therefore contribute to GWP.

Explain the impact of foreign investment on the Australian economy

 

[Scrub Ya Flaps]

GWP is measured by totalling all GDP estimates for each country. All the countries in the world who produce good and services contribute to gross world product.

The global economy consists of all countries in the world that produce goods and services and therefore contribute to GWP.

Explain the impact of foreign investment on the Australian economy

Foreign investment supplement domestic savings so that means that more capital can be purchased and used (right? tell me if I'm wrong i know I'm that good it won't hurt my feelings haha) this means something haha... i think if the servicing costs of the capital are not as high as the income received off of them then it improves the CAD and increase production which drives prices down, increased demand, and thus decreased employment as firms seek to maximise profit by allocating more resources to create a higher rate of production to maximise profit... WTF if this is all wrong i just wanna say anyway that i'm good with the theory and how everything combines, its just statistics to back it up i cant seem to rememeber or find. is jsut doing theory crap enough to get band 5 atleast? LOL at me i know

EDIT: if the game is still going my question is
WHAT ARE SOME IMPACTS ON THE GLOBAL ECONOMY OF INTERNATIONAL ORGANISATIONS AND CONTEMPORARY TRADING BLOCS? (sorry for capitals no bold in edit box)
and BTW this was actually one of our trial questions, though we did do our trial in term 2 not 3 like most of you haha (and again with the brackets haha... we did finish all topics by the start of term 3.. at least our teacher wanted us to anyway)

 

[Rocket Man]

WHAT ARE SOME IMPACTS ON THE GLOBAL ECONOMY OF INTERNATIONAL ORGANISATIONS AND CONTEMPORARY TRADING BLOCS?

Can someone explain this question im not 100% sure. Im guessing talk about WTO and its impact in promoting free trade and how effective/ineffective protection has been? Sorry for lack of detail im studying up tomorrow i promise

 

[ONoezzz]

WHAT ARE SOME IMPACTS ON THE GLOBAL ECONOMY OF INTERNATIONAL ORGANISATIONS AND CONTEMPORARY TRADING BLOCS?

Impacts of International Organisations include:
- diminishing protectionist policies e.g. Australia - Hawke government abolished tariffs, quotas and sales tax in 1988 and 1991
- free trade between countries - emergence of non-discriminatory (trade with other countries outside region) groups APEC, ASEAN, etc. aiming to eliminate trade restrictions between member nations
- forcing domestic firms to become more internationally competitive

Impacts of Contemporary Trading Blocs:
- reduced trade barriers to developing countries e.g. Australia and Indonesia as a result of ASEAN
- reduced international competitiveness of non-member countries e.g. EU's agricultural subsidies provide 37% of farmers' incomes, making their produce cheaper than Australia's exports. Australia relies a lot on the agricultural sector, so this subsidy reduces our competitiveness

Briefly describe the advantages and disadvantages of free trade.
P.S. Oh and Economics game = un-fail

 

[ADF1992]

Briefly describe the advantages and disadvantages of free trade.

Advantages of free trade:
> international competitiveness will increase in the long-term as industries become more efficient and productive to survive.
> economies of scale is achieved
> specialisation
> economic growth in the long term
>higher living standards

Disadvantages:
>infant industry argument - infant industries can't cope against competing with foreign industries which have been around longer and are much more efficient, therefore leading to the infant industries dying out( bad terminology lmao).

> unemployment will go up in the short -term as businesses shut down, predominanty affecting those with limited skills, hence being unable to find other work

>dumping - the process of selling products under production costs due to excess supply which can be damaging to an economies industry.


QUESTION : what are the causes AND effects of unemployment.

 

[roli]

what are the causes AND effects of unemployment.

Causes:

- lower economic rate of growth
- contractionary macroeconomic policies (aggregate demand fall)
- the contraints on economic growth consstrain employment growth too
- increase in labour participation rate increases unemployment in the short-term (Okun's Law)
- increase in productivity levels increases unemployment in the short-term (Okun's Law)
- technological change/innovation leading to substituting of capital for labour short-term
- structural change leading to short-term unemployment where older, inefficient industries decline
- higher labour costs leads to employers substituting of capital for labour
- inadequate training and education levels result in mismatch of skills demanded by employers and skills of workers
- labour market inflexibility decreases incentive for employers to use labour inputs

Effects:

- opportunity cost of unutilised labour resources (loss of growth/productive capacity)
- decreased material living standards since less output
- hysteresis may occur
- greater budgetary burden on the government to pay for welfare
- lower wage growths for those still unemployed (higher supply)
- increased poverty
- social problems associated with this poverty

How have Australia's trade and financial flows been influenced by globalisation?

 

[ADF1992]

oh and another effect of unemployment is the budget deficit through automatic stablisers- revenue
goes down as incoem tax reduces an expenditure goes up from increase unemployment benefits.

P.S i dont like that question! =(

answer it and ask again=]


btw. if i say that globalisation has influenced Australia to reduce trade barriers and therefore increased our international competitiveness and our impact on world trade. Financially globalisation has led to the deregulation of our financial sector through the floating of AUD and the banking sector becoming more competitive through foreign companies bla bla bla. is that it?