Economics Marathon 2014 anyone??? (5 Viewers)

[avi888]

Contractionary stance (increase taxation and reduce gov spending)
Reasons: aim to maintain sustained level of cad and reduce budget deficit and aim for fiscal consolidation with$ 2 billion surplus by 2025


Please correct me if im wrong




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Yep you are on point

 

[Maxwell]

Outline a reason for the greater degree of inequality in the distribution of wealth that (i assume this is meant to be 'than') the distribution of income?

i) Accrual and investment: Higher income earners, such as those in developed nations, have the ability to save their surplus funds and to invest these funds, thereby generating additional wealth. Conversely, lower-income earners, such as those in developing nations, lack access to robust financial institutions, and thus cannot actively accrue or invest their money. This therefore leads to a large disparity in the distribution of wealth; such to the point where the distribution of wealth is more unevenly distributed than income.



lol is that even a valid answer? it's probs too late to be doing eco coz i actually need to think

 

[Maxwell]

Question i made: Outline TWO product market and TWO factor market reforms and analyse their impacts. (6)

 

[Indoz]

yep hope people come on board.

I won't be answering questions as it is of no use to you guys. but i'll help out by posting good questions and help solve any difficulties that arise

i cant imagine a world without mreditor helping us with economics
mreditor should be a moderator

 

[avi888]

Its very round about, not very direct probs 1/2

 

[avi888]

i) Accrual and investment: Higher income earners, such as those in developed nations, have the ability to save their surplus funds and to invest these funds, thereby generating additional wealth. Conversely, lower-income earners, such as those in developing nations, lack access to robust financial institutions, and thus cannot actively accrue or invest their money. This therefore leads to a large disparity in the distribution of wealth; such to the point where the distribution of wealth is more unevenly distributed than income.



lol is that even a valid answer? it's probs too late to be doing eco coz i actually need to think

very round about not really legit LOL , policy response is the best answer, where inequality in income has had policy responses

 

[Maxwell]

.

 

[Maxwell]

very round about not really legit LOL , policy response is the best answer, where inequality in income has had policy responses

One could argue that by addressing income inequality, you are indirectly addressing wealth (as wealth is generated via income accrual). Additionally, wealth has had policy responses, such as compulsory superannuation.

p.s. my answer is valid i've read it in dixon

 

[avi888]

One could argue that by addressing income inequality, you are indirectly addressing wealth (as wealth is generated via income accrual). Additionally, wealth has had policy responses, such as compulsory superannuation.

p.s. my answer is valid i've read it in dixon

lol dixon, you can argue anything in economics LOL , but i was trying to say that it wasnt the best answer, like its max 2 marks right but thanks for enlightening me anyway

the question is max 2 marks edit*

 

[avi888]

How about this one, outline how a government has to deal with conflicting economic objectives? 5 marks

 

[goobypls]

Anyone know any events from this year to use in macro policy other than budget?

 

[emilios]

How about this one, outline how a government has to deal with conflicting economic objectives? 5 marks

A key objective of government policy is to promote sustainable long term economic growth. However, a government must also make certain compromises in order to achieve this goal without causing harm to the economy in other ways. Economic growth can often lead to poorer environmental sustainability since resources must be depleted at a faster rate to meet growing AD and a higher output of these goods often resulst in the growth of negative externalities such as pollution and emission of greenhouse gases.

As an economy's output increases, firms experience higher levels of corporate profits that are redistributed as income in the form of wages and dividend payments, increasing the level of income in the economy and hence the level of spending. Furthermore, if the economy is growing faster than other economies, this given economy will become a net importer of goods and potentially a net exporter of financial and capital investments and thus worsen external stability. Increased spending in the domestic market will put upward pressure on the price level of this economy (i.e. weaken price stability), thereby increasing inflation. If a government wishes to decrease this level of inflation, it risks increasing unemployment as demonstrated by the Phillips curve below which outlines the inverse relationship between inflation and unemployment. This is because lower spending results in lower economic activity and a decrease in the level of demand for labour.

[Imagine there's a short run phillips curve here lel]

Hence, government must deal with the consequences of enacting policies which inevitably conflict with other objectives they may hold, and in particular, must govern the level of economic growth prudently.

 

[mreditor16]

q10, 2005 hsc:
Which of the following is the likely effect on Australia of a recession in the economies
of all Australia’s major trading partners?
(A) A reduction in Australia’s imports and a decrease in the current account deficit
(B) A reduction in Australia’s exports and an increase in the current account deficit
(C) A reduction in foreign investment into Australia and a decrease in the financial
account surplus
(D) An increase in foreign investment into Australia and a decrease in the financial
account surplus

FMS, can you be a bit more restrained with your posting? it is has created a lot of havoc in the marathon thread, with questions flying here and there. so no-one knows what to answer, and once they answer it, no proper feedback can be given.

so, this is to everyone, actually - can we try to (as much as possible) do one question at a time? it makes it easier for everyone. thanks

 

[mreditor16]

i cant imagine a world without mreditor helping us with economics
mreditor should be a moderator

thanks for the kind words Indoz!

 

[mreditor16]

A highway currently passes through a country town. The government is proposing to build a bypass that diverts highway traffic away from the town. Discuss the costs and benefits of this proposal.

The creation of a bypass reflects an increase in infrastructure expenditure by the government, as a result aggregate demand will increase, as per AD=C+I+G+(X-M) therefore facilitating a multiplied increase in economic growth, which will improve the quality of life for the residents in the town and the economy, also an increase in infrastructure expenditure will result in an increase in employment in the construction/planning sector of the economy, reducing unemployment and further improving the quality of life. Also diverting the negative externalities of pollution away form the town reflects an increase in quality of life for its residents. However, this increase in aggregate demand may reflect an increase in the budget deficit, meaning governments may finance the deficit through the sale of treasury bonds in the private sector resulting in the "crowding out effect" or the worsening of the CAD by borrowing from overseas. Also diverting consumers away from the town will result in a decrease in demand for the towns goods and services , meaning an increase in unemployment and profit for the towns residents, thereby resulting in a decrease in quality of life. Further, in the short term the construction of the bypass will represent a displacement of people from their homes and the reduction of the beauty of the environment resulting in a decrease is social cohesion.


I got a bit carried away, writing too much , but u get the idea

its a great answer.

just be careful with expression. and your first sentence is way too long.

btw your bolded part is not explained properly - from what you say, it seems you are implying that increase in AD leads to deficit. what you should be saying is that the increased expenditure led to a deficit and so on.

and one last thing, be careful, because you do have a wonderful range of impacts that show your extensive knowledge. but don't link so many of them back to quality of life. it detracts from your answer.

Otherwise it is an excellent excellent answer. a model answer

would probably get 4/4.

 

[faisalabdul16]

FMS is in year 10, why is he asking questions?

 

[mreditor16]

i) Costs: With less motor-vehicle traffic comes less demand for the town's products. Consequently, local business cessation may result, thereby increasing the local level of unemployment. This creates a greater reliance on transfer payments, which will in turn put downwards pressure on the budget. Another cost would be the negative externalities associated with the construction of the actual highway itself, as generally production results in the emission of CO2.
ii) Benefits: Assuming the bypass shortens the trip-time, this will facilitate the movement of goods in the economy, thus increasing aggregate supply in the long-run. This will increase real-incomes and lead to a rise in living standards, as these factors are correlated with economic growth. Another benefit would be the multiplier effect of the actual production of the bypass, which, depending on the marginal propensity to save of the economy, will generally result in an increase in national income. As a result, living standards and real-income levels increase.


Idk if i wrote enough for 4 marks, but meh.

be more clear about what you mean by "downward pressure"

otherwise, a good answer.

would probably get 4/4. but still take a look at avi's answer, which I think has an edge over yours.

even still, great answers guys!

I'm impressed

 

[mreditor16]

Outline the features of globalisation, and analyse the impact of globalisation on the standard of
living in the global economy

okay, no-one has answered this. but dw, it is an essay question. and we don't have the time here to answer it. :/

Define the term Trade Weighted Index

This still has not been answered.

dw, just memorise and you can get 95+
this question was in the 2005 paper so yeah it can appear again.

smh. and by that, I do not mean Sydney Morning Herald.

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btw, just want to mention this - I enjoy economics, so I want to help out with this thread, considering that I've gone through the process of HSC economics. but there's so much I can do, especially because I'm studying myself for my other HSC subjects. So, if I see something that I really need to point out, I will. But its up to you guys to correct any mistakes you see made by each other. Through that, all of you guys will gain.

And also make sure to keep the thread organised. Reading through the first 40 posts was a shamble haha

 

[mreditor16]

A key objective of government policy is to promote sustainable long term economic growth. However, a government must also make certain compromises in order to achieve this goal without causing harm to the economy in other ways. Economic growth can often lead to poorer environmental sustainability since resources must be depleted at a faster rate to meet growing AD and a higher output of these goods often resulst in the growth of negative externalities such as pollution and emission of greenhouse gases.

As an economy's output increases, firms experience higher levels of corporate profits that are redistributed as income in the form of wages and dividend payments, increasing the level of income in the economy and hence the level of spending. Furthermore, if the economy is growing faster than other economies, this given economy will become a net importer of goods and potentially a net exporter of financial and capital investments and thus worsen external stability. Increased spending in the domestic market will put upward pressure on the price level of this economy (i.e. weaken price stability), thereby increasing inflation. If a government wishes to decrease this level of inflation, it risks increasing unemployment as demonstrated by the Phillips curve below which outlines the inverse relationship between inflation and unemployment. This is because lower spending results in lower economic activity and a decrease in the level of demand for labour.

[Imagine there's a short run phillips curve here lel]

Hence, government must deal with the consequences of enacting policies which inevitably conflict with other objectives they may hold, and in particular, must govern the level of economic growth prudently.

it might be good to clearly articulate how those changes in those flows leads to a worsening external stability. i.e. say which component of the balance of payments experiences a change and then how it leads to an increase in CAD and thus a worsening of external stability.

your second paragraph seems a bit jumbled when you get to the middle. so you might want to structure it a bit better... e.g. by splitting up your second paragraph.

just to enhance your answer, you might want to say through what means the govt can decrease inflation.

all in all, a great answer. you've got great ideas and have covered a range of conflicting objectives and detailed them nicely. right now, it is a 4/5 answer, but it is so damn close to a 5/5. the main thing which stops me from giving a 5 is the second paragraph gets a bit confusing - and I have to put in the effort to figure out what is happening.

 

[emilios]

it might be good to clearly articulate how those changes in those flows leads to a worsening external stability. i.e. say which component of the balance of payments experiences a change and then how it leads to an increase in CAD and thus a worsening of external stability.

your second paragraph seems a bit jumbled when you get to the middle. so you might want to structure it a bit better... e.g. by splitting up your second paragraph.

just to enhance your answer, you might want to say through what means the govt can decrease inflation.

all in all, a great answer. you've got great ideas and have covered a range of conflicting objectives and detailed them nicely. right now, it is a 4/5 answer, but it is so damn close to a 5/5. the main thing which stops me from giving a 5 is the second paragraph gets a bit confusing - and I have to put in the effort to figure out what is happening.

oh good pick with the whole specifying what component of the BoP thing. yeah i guess i tried to answer this like an exam questions and we can sometimes tend to word-vomit in exam questions and not really stop to think about clarity haha

thanks a lot