ecos comp (1 Viewer)

[Bambul]

That was the idea. If anyone actually knew what a liquidity trap was I would be quite surprised. But if you know what the other three things are you can eliminate them and get the right answer.

For the record, I've only ever heard the term liquidity trap once, in a speech by RBA Deputy Governor, Glenn Stevens.

To the people who did the eco comp last year, was this one easier or harder than last year's?

 

[bobo123]

bah crap i got 14 wrong

 

[SBHS4EVER]

We got lucky wid liquidity trap- we did it the day before with our economics teacher, despite the fact i only remeber wat it is thanx to the fact he said we DONT need to know what it is, right marsenal!

SBHS4EVER

 

[Nick]

liquidity trap made sense because japan runs excessive current account surpluses and is very liquid.. so it was the most likely answer.. not sure if the comp was hard though, wont know till we get results ..
i forgot it was negatively marked so hopefully i got every answer right! cept got that "in the long run we're all dead" one wrong

 

[Bambul]

Actually liquidity refers to the inability of the said economy to lower real interest rates past a certain point, which acts as a barrier to increased liquidity in the financial markets. So it's not enough liquidity, as opposed to too much.

Anyone interested in reading the speech on deflation from where the question got its inspiration can click here. It is interesting, IMO anyway. Just don't mention this sort of thing in an exam because it goes against a lot of economic theory you learn in high school.

Otherwise, here is an excerpt.

To put this at its most stark, imagine an economy in which deflation is strongly expected to continue, at a rate which exceeds the natural real interest rate in the economy that is the equilibrium return on real capital. In that situation, because nominal interest rates cannot fall below zero, the real interest rate set by the central bank cannot go below the natural or 'neutral' rate. Since conventional monetary policy works in an expansionary direction by lowering interest rates in the financial sector below the neutral rate, it follows that conventional monetary policy is rendered incapable of applying stimulus to an economy in this situation. The real interest rate is too high, which means that policy remains too contractionary, prolonging the deflationary pressure. There is a 'deflation trap', or what we learned about in undergraduate economics as a 'liquidity trap'.

 

[shaynO]

what award (credit/dist/highd/prize) would doing every question and getting 5 wrong get you on average?

 

[Bambul]

Probably a prize. But don't quote me.

 

[fusion]

I found last year's one easier, I got credit for it though. This year I'm uncertain I'll just wait till the results come in. This girl in my class got top 1% last year though, I'm ranked after her -- she studies like a machine

 

[Tia]

Answers?

Can someone tell me the answers to the exam? I really wanna noe. i didn't do the comp, but i'm dying with curiosity to know the answers! Thanks!

 

[Tia]

help

answers people, answers!! i made a bet with my friends, i need answers! we can't wait n e longer!!

please, please please, please please, please please, please please, please please, please please, please please, please please, please please, please please, please please, please please, please please, please please, please

 

[Minai]

I could give u my answers, but I'm not 100% sure of them...and I dunno if Bambul want's to release the answers yet..?

 

[Bambul]

You can give them your answers if you want.

As soon as we get everything with the official answers worked out I'll have a talk with some of the "techy" people in the organising committee and hopefully the question booklets and the answers will be put up on our website. But until then, I'd rather not give out the answers.

*But*, if someone wants, I can post up a copy of the economics question booklet here fairly quickly.

 

[Newbie]

is there a quota on prizes like top 1% or is it by marks?

 

[fusion]

I think its by marks, the girl in my class got $200

 

[Newbie]

200!
thats heaps

i wana win some cash! but i screwed it

 

[Bambul]

It changes from year to year, but I think it's the top 200 people in the state or so.

 

[Newbie]

how many people do it?

 

[Bambul]

Across Australia, about 7,000 year 11 and 12 students. That is Economics only (ie. excluding Business Studies)

 

[Tia]

don't worry about the answers, until u wanna tell me tell me, it's just a bet so its not so important! thanks n e way!!

 

[Exeter]

5 wrong gets u a prize? wow


i got 98.2...i think thats a percentile last year and i didnt get squat