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Fiscal policy!! (1 Viewer)

manscux

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hey guys,, did anybody do the fiscal question. So many people have done monetary

anyway.....

could anybody check this scaffold


Stabilising fluctuations in the business cycle offers an optimistic and stable economic environment conducive to sound investment decisions by business and to encourage workers to invest in upgrading their skills to take advantage of new employment opportunities. However the depth, diversity and ever-changing nature of the economy means that governments may need to use its counter cyclical or macroeconomic policies to reduce or raise aggregate demand (AD).
• Currently economic growth has been
• For this reason, both Julia Gillard and Wayne Swan want to bring the budget to a surplus → increasing T and reducing G
• To supplement the governments objective of a rather contractionary stance, Glen Stevenson’s has promised to pursue non-inflationary economic growth through a rather neutral monetary policy stance


Fiscal policy is the heart of the management of the economy, often thought of as the most successful at stimulating AD because of its rather small time lag
Define:
exercised through budget
Current trends:
• The move from a $21.7 billion budget surplus in 2008-09 to a $57.6 billion budget deficit in 2009-10 as suggested by stimulus
• G >T, especially after the GFC. 17 years of strong growth and budget surplus especially fuelled by strong taxation from commodities

Fiscal policy commonly exercised through the budget.
• Discretionary (structural component)
• Non-discretionary (cyclical component) → through automatic stabilisers

ECONOMIC GROWTH
can use government expenditure to increase AD via the multiplie if it wants expansionary stance
define expansionary stance Rationale for this through Keneysia deflatioanry gaps
RATIONALE DIAGRAM
explain diagram and how government stiulates demand
Expansionary stance can also be achieved by redcing taxation

do the same thing if government wants a contractionary stance
define contractionary
Rationale for this through infaltionary gaps
diagram
explain

REAL WORLD EXAMPLE OF HOW government did this during gfc

Fiscal policy was very effective during GFC, for that reason treasurer got internationally recognised award
• Many people argue fiscal policy was temporary, targeted and timely, consisting of a series of one-off cash handouts, shovel-ready minor capital woks and infrastructure projects --. All discretionary policy
• Discretionary policy → targeted BER which helped construction industry
• Increased employment growth which hires ¼ workers
• Had a multiplier effect in every neighbourhood
• Tended to see less people out of work. U/E while rose to 5.2% wasn’t significant compared to other OECD countries (USA 9.6%)
• Non-discretionary policy via stabilisers → STATS

Currently with GFC over, government tends to move away reform deficit and into surplus by 2012/13. Fiscal consolidation. G < T.
• Despite current domestic and global problems, export revenue has risen and investment demand has also seen increases. G can be eased as greater exports will generate taxation for governments

This could effect income equality
As a fiscal surplus would mean that G is reducing while taxation is increasing.
Show how sometimes policy may conflict as most of the decrease in government expenditure is public services

income inequality
could effect by raising/reducing government expenditure
what happens when they reduce
what happens when they increase

Can also do this through taxation
currently have progressive taxation, but some policies have tended to make tax regressive
what hapends when they reduce taxtion --> through threshold
what happends when they increase taxation --> GST or increase in top marginal rates

In current budget:
Governemnt expenditure--> in an attempt to bring fiscal suplus reducing G i..e youth allowance decreasing, social security decreasing
threshold is increasing but top marginal rates also increasing thus retrenching inequality
GST also tend to make the taxation system more regressive


cONCLUSION: with atempts to consolidate budget the governemtn must ensure it does not increase inequality.
Also with a ore contractionary stance, the role of discretioanry policy will start to reduce


very detailed.... so what marks would i get

p.s i wrote 8 pages
 

Mjontrix

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Dude, you destroyed the essay..... Makes me lose hope of even getting 15 LMAO
 

Mjontrix

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hey guys,, did anybody do the fiscal question. So many people have done monetary

anyway.....

could anybody check this scaffold


Stabilising fluctuations in the business cycle offers an optimistic and stable economic environment conducive to sound investment decisions by business and to encourage workers to invest in upgrading their skills to take advantage of new employment opportunities. However the depth, diversity and ever-changing nature of the economy means that governments may need to use its counter cyclical or macroeconomic policies to reduce or raise aggregate demand (AD).
• Currently economic growth has been
• For this reason, both Julia Gillard and Wayne Swan want to bring the budget to a surplus → increasing T and reducing G
• To supplement the governments objective of a rather contractionary stance, Glen Stevenson’s has promised to pursue non-inflationary economic growth through a rather neutral monetary policy stance


Fiscal policy is the heart of the management of the economy, often thought of as the most successful at stimulating AD because of its rather small time lag
Define:
exercised through budget
Current trends:
• The move from a $21.7 billion budget surplus in 2008-09 to a $57.6 billion budget deficit in 2009-10 as suggested by stimulus
• G >T, especially after the GFC. 17 years of strong growth and budget surplus especially fuelled by strong taxation from commodities

Fiscal policy commonly exercised through the budget.
• Discretionary (structural component)
• Non-discretionary (cyclical component) → through automatic stabilisers

ECONOMIC GROWTH
can use government expenditure to increase AD via the multiplie if it wants expansionary stance
define expansionary stance Rationale for this through Keneysia deflatioanry gaps
RATIONALE DIAGRAM
explain diagram and how government stiulates demand
Expansionary stance can also be achieved by redcing taxation

do the same thing if government wants a contractionary stance
define contractionary
Rationale for this through infaltionary gaps
diagram
explain

REAL WORLD EXAMPLE OF HOW government did this during gfc

Fiscal policy was very effective during GFC, for that reason treasurer got internationally recognised award
• Many people argue fiscal policy was temporary, targeted and timely, consisting of a series of one-off cash handouts, shovel-ready minor capital woks and infrastructure projects --. All discretionary policy
• Discretionary policy → targeted BER which helped construction industry
• Increased employment growth which hires ¼ workers
• Had a multiplier effect in every neighbourhood
• Tended to see less people out of work. U/E while rose to 5.2% wasn’t significant compared to other OECD countries (USA 9.6%)
• Non-discretionary policy via stabilisers → STATS

Currently with GFC over, government tends to move away reform deficit and into surplus by 2012/13. Fiscal consolidation. G < T.
• Despite current domestic and global problems, export revenue has risen and investment demand has also seen increases. G can be eased as greater exports will generate taxation for governments

This could effect income equality
As a fiscal surplus would mean that G is reducing while taxation is increasing.
Show how sometimes policy may conflict as most of the decrease in government expenditure is public services

income inequality
could effect by raising/reducing government expenditure
what happens when they reduce
what happens when they increase

Can also do this through taxation
currently have progressive taxation, but some policies have tended to make tax regressive
what hapends when they reduce taxtion --> through threshold
what happends when they increase taxation --> GST or increase in top marginal rates

In current budget:
Governemnt expenditure--> in an attempt to bring fiscal suplus reducing G i..e youth allowance decreasing, social security decreasing
threshold is increasing but top marginal rates also increasing thus retrenching inequality
GST also tend to make the taxation system more regressive


cONCLUSION: with atempts to consolidate budget the governemtn must ensure it does not increase inequality.
Also with a ore contractionary stance, the role of discretioanry policy will start to reduce


very detailed.... so what marks would i get

p.s i wrote 8 pages
Btw what was the question for fiscal again?
 

manscux

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how can fiscal policy be used to effect economic growth and income distribution

DID ANYBODY DO THIS ESSAY DIFFERENTLY ?????????
 

determine

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Get determine here to evaluate this essay lol
just your luck LOL! i happened to be reading this! i think that will definitely fall into the A-range response! i would say 18-19 most likely, depending on how it was written in the exam. i'm just concerned that if you only wrote 8 pages for all that stuff, you may have been a bit too brief with it all (unless you have like 10 words per line!) however, the structure seems good, you've used diagrams, and it seems like you've answered the question, while also incorporating the economic information presented in the stimulus (the whole discretionary policy aspect and the return to surplus in 2013-14 as that graph showed). good effort!!
 

determine

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I Did:

Intro - All the definitions (fiscal) objectives counter the business cycle (diagram) & stats on current & previous years outcome & mentioned stance

1st Para - The different budget outcomes briefly

2nd Para - Income Inequality
Briefly about Income inequality, sources of income, how the prog. tax system & use of transfer payments can make it more equal. Mentioned taxation reforms under Howard including GST & increasing indirect taxes may have contributed in rise of Gini from .3 to .33. Stats: 48% of reveneue in 2000 was income taxes 15% indirect 2011: 42% income, 27% indirect. Rudd attempted to improve equality by raising the LITO & 15% MRT from 30-37k (offsetting bracket creep). Mentioned carbon tax how the tax free threshold is supposed to rise 21k which would help stimulate the economy since higher MPC's (low income earners)

3rd Para - 2000-07

Mentioned Howard used counter cyclical policies, trying to smoothen out business cycle & contain inflation which rose to 4.5%. Just kept talking about this example for a while. sucessive surpluses...used stimulus

4th Para GFC

Lehmans collaped = recession impacted by IBC, talked about auto stabillisers & fiscal stimulus (with stats) aimed at people with high mpc (low income earners) to stimulate AD. Brought in the keynesian cross diagram (try to fill deflationary gap) budget went to -4.3% of GDP..all that stuff mentioned UN only went to 5.8% lower than rest of world. Mentioned fiscal stimulus was discretionary & was part of a global coordination of policy talked about china (586bn) & US (787bn) & its TARP program to recapitalise banks. etc. quite a long paragraph, said monetary went from 7.5 to 3 etc.

5th Para GFC recovery

Return to surplus, also mentioned flood levy which would help those who have lost homes to try mitigate the inequality of incomes arising from the natural disaster

6th Para - Euro Debt Crisis

Talked about the package that was released on the morning of the exam as fiscal stimulus (1.4 trillion dollars) to stop spread of contagion.


Cant remeber everything i wrote but it was 12 pages
seems decent enough! and good length! i know that quantity is not necessarily indicate of quality, but I believe that the more you write in these essays, IN GENERAL, the greater the chance your mark will be higher (provided you dont write 4 words per line or something haha!). last year I wrote 16 pages for section 3 and 15 pages for section 4, and I got 20/20 for both essays (as I applied for my raw marks). so that says something about the correlation between quantity and quality i guess. :)
 

determine

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Ill get 17 or 18/20 in Multis, probably about full marks in short answers, My micro essay is a gun (got 18/20 from tough markers & have improved it since trials) is hopefully 19,20 but im not sure if i mentioned product & factor markets enough (only did it at the beginning of each paragraph) (talked about labour, reduced protectionism, financial dereg, privatisation, Nat comp policy + Airline & telecom industry)
what would i need for a state ranking? (probably wrote 6-7 words line) just hope this fiscal essay is good, thought i could differentiate myself with the euro package cuz it only came out in the morning.
okay so if you got 18 for multiple choice, 39 for short answers, 20 for micro and 19 for fiscal, then that'd be 96 raw, and I think that could very well be a state rank! I'd think you need 93 or more raw to even have a chance at a state rank, but there's only 10 spots! what rank is your school?
 

myafanatic

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seems decent enough! and good length! i know that quantity is not necessarily indicate of quality, but I believe that the more you write in these essays, IN GENERAL, the greater the chance your mark will be higher (provided you dont write 4 words per line or something haha!). last year I wrote 16 pages for section 3 and 15 pages for section 4, and I got 20/20 for both essays (as I applied for my raw marks). so that says something about the correlation between quantity and quality i guess. :)
Holy crap dude, how many words do you write a line?!
And out of curiosity, what was the breakdown of your raw marks?
 
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manscux

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yah that is my concern!!! i may have been to breif but i wrote about 9 words per line

any way can somebody check my microeconomic essay on the other response

P.S THANKS determine...

would you say 93 is a state rank
\so far i got 18/20 for multiple
not sure about how to answer one of the short response (5 marks that atlked about international business cycle)
so saying 38/40
and than its the two essays not sure!!!

anybody help me out especially with how to answer the 5 marker, as i believe you should not be ased to talk about fiscal and monetary policy when they question is on globalisation --> which is in the syllabus

thanks
 

determine

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Holy crap dude, how many words do you write a line?!
And out of curiosity, what was the breakdown of your raw marks?
i cant remember how many words I wrote per line LOL, but I think it was like 6-7.. my essays were each 2000 words though, as I typed them up after I received them back from BOS. :)

my raw mark breakdown was 18 multiple choice, 36/40 short answers and then 20/20 for the 2 essays. however, because last year's exam was quite difficult, this explains why 94 was 3rd in the state! this year 94 raw may just scrape a state rank (10th) or not even be a state rank at all in my opinion!
 

determine

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10th or so, Not sure but somewhere up there, I shared equal first . In trials i had 19/20 multis, 40/40 short answers 18/20 micro 15/20 CAD (cause i didn't mention TOT as a cause & ran out of time a little - tho i wrote a similar essay which was marked a 19 by someone else) so that was 92. Only thing for these s/a is the environment 5 marker, i explained how a market based system would work (with permits) & it incentivises greener methods of production, talked about effects (inflation & free riding as negatives) tho i didnt mention regulations that much only near the endish.
oh okay! then you definitely have a real chance! are you at a selective school? good effort in the trials. ahh in my trial I pulled 20/20 for multiple choice, 39/40 for short answers and then 20/20 for both essays, so by that standard, my HSC exam appeared to be an "underperformance" by me LOL. you should probably predict a little less for the short answers though, because you never really know how they're going to mark it! but I would definitely say that you are in with a shot for a state rank! :)
 

determine

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yah that is my concern!!! i may have been to breif but i wrote about 9 words per line

any way can somebody check my microeconomic essay on the other response

P.S THANKS determine...

would you say 93 is a state rank
\so far i got 18/20 for multiple
not sure about how to answer one of the short response (5 marks that atlked about international business cycle)
so saying 38/40
and than its the two essays not sure!!!

anybody help me out especially with how to answer the 5 marker, as i believe you should not be ased to talk about fiscal and monetary policy when they question is on globalisation --> which is in the syllabus

thanks
well I think that it's still a decent length then, so hopefully it turns out good! not a problem! :)
i don't think 93 will cut a state rank though this year in my honest opinion - I know that multiple choice was difficult, but with so many people predicting good marks for short answers (and let's face it, the questions were fairly straightforward except for maybe the case study one) and good, fairly typical essay questions, you'll need about 95 for a state rank! that's just my guess. take it from someone who has done both this year's paper but also who did last year's for the actual HSC exam. hope this helps.. :)

with the 5 marker, i think you're wrong in saying that, because it says "government policies" in the syllabus, which technically, as it would be in the domestic economy, entails monetary policy and fiscal policy. and especially when the question is asking about the international business cycle, clearly you would need to make reference to the policies used to improve the economy's growth prospects etc. i think if you discussed FDI and trade etc it will be looked upon by the markers as an "easy way out", and perhaps may indicate to them that you didn't really understand the difference between the IBC and FDI, trade and investment.
 

determine

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Not a selective school, but like the top 5-6 people in Eco are very smart, we all do 4u math etc. With the multies, i did 17 C but im pretty sure it is D (the tariff one, cause the govt takes $500) & with 7 i can see how both C & D are right have they ever given 2 multies right? like last year the answers for one the them were A & D.

- Just got to hope people dont do that well in that 5 marker + multis
oh okay! yes actually, I just really 17 is D LOL. silly overlook by me! good pick-up!

yes, they have given 2 multis right before, but the chance of doing that is slim unless there's absolutely no way the options can be differentiated!
 

eyeswideshut

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seems decent enough! and good length! i know that quantity is not necessarily indicate of quality, but I believe that the more you write in these essays, IN GENERAL, the greater the chance your mark will be higher (provided you dont write 4 words per line or something haha!). last year I wrote 16 pages for section 3 and 15 pages for section 4, and I got 20/20 for both essays (as I applied for my raw marks). so that says something about the correlation between quantity and quality i guess. :)
holy shit you wrote 16 pages??? I thought my 10 was already a lot and I write like 5 words per line :p does it cost to apply for raw mark? I didn't know it was possible to get 20/20 but apparently it is.
 

determine

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holy shit you wrote 16 pages??? I thought my 10 was already a lot and I write like 5 words per line :p does it cost to apply for raw mark? I didn't know it was possible to get 20/20 but apparently it is.
hhhahaha yeah! well as I said, both my essays were 2000 words! yeah, to be honest, I'm pretty sure 20/20 is very rare. however, my essays, as the length indicates, were obviously very very detailed and they must have felt they had no other choice LOL! yes, it costs $30 to apply for your raw marks, but you can get all your physical examination papers back, state ranks, the marks your school submitted to BOS etc. i reckon the $30 was well worth it! :)
 

eyeswideshut

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hhhahaha yeah! well as I said, both my essays were 2000 words! yeah, to be honest, I'm pretty sure 20/20 is very rare. however, my essays, as the length indicates, were obviously very very detailed and they must have felt they had no other choice LOL! yes, it costs $30 to apply for your raw marks, but you can get all your physical examination papers back, state ranks, the marks your school submitted to BOS etc. i reckon the $30 was well worth it! :)
hmmm I may consider doing that actually :)
 

determine

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hmmm I may consider doing that actually :)
yeah, although it can be quite disheartening too if you see you were 1 rank off state rank.. LOL (i got 21 for business and made a dreadful mistake in the exam which would have cost me!).
 

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