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Section I - Multiple Choice (1 Viewer)

Stalker Ninja

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The main focus of the question is which policy action is most likely to reduce the economic impact of the change in the ToT, rather than how to improve the ToT

A fall in the ToT means lower export revenue --> lower AD and economic activity. Therefore C, an increase in discretionary expenditure will help to stimulate economic activity etc
 

kev-is-red

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my answer was C for Q7?
You're right.

High ToT is generally associated with an increase in demand for Australian exports. Therefore if the ToT deteriorates, demand for Australian exports will deteriorate as well. Dirtying the float to appreciate the value of the $A would only further weaken demand for exports.

This is all from the Leading Edge textbook. If anyone wants to dispute it, take it up with Tim Dixon.
 

Graham Arnold

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The main focus of the question is which policy action is most likely to reduce the economic impact of the change in the ToT, rather than how to improve the ToT

A fall in the ToT means lower export revenue --> lower AD and economic activity. Therefore C, an increase in discretionary expenditure will help to stimulate economic activity etc
You hit the nail on the head, anyone who tries arguing with you is a retard and should look at their damn textbooks for once
 

Graham Arnold

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I quoted my textbook, which shows that anyone who is arguing for D is clueless.
yes the answer is increasing discretionary spending by the government these people are so stupid lol...no wonder not everyone gets a band 6
 

blackvegetable

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Ok i was arguing against those who put a/d which is completely wrong.

I see why you think it is C , but B would cause an increase in the tot which would reduce the economic impact of the change in the tot because its reversing it. That is more likely than C cause it is more directly related to it. Period
 

friend177

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yes the answer is increasing discretionary spending by the government these people are so stupid lol...no wonder not everyone gets a band 6
i was arguing it was C cause the question ask what made it dropped and an appreciation makes it rise
 

Stalker Ninja

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Ok i was arguing against those who put a/d which is completely wrong.

I see why you think it is C , but B would cause an increase in the tot which would reduce the economic impact of the change in the tot because its reversing it. That is more likely than C cause it is more directly related to it. Period

An increase in income tax rates --> possible reduction in spending/import spending - a fall in import volumes has nothing to do with import prices
 

blackvegetable

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I already explained this, VOLUME COUNTS, its the total LEVEL of prices, not just the average price. What you are saying is supporting A and D to be right not C
 

blackvegetable

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Terms of Trade = Price of Imports and Volume of Imports
Price of Exports and Volume of Exports

LEADING EDGE IS wrong when it just says export prices over import prices
 

friend177

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Terms of Trade = Price of Imports and Volume of Imports
Price of Exports and Volume of Exports

LEADING EDGE IS wrong when it just says export prices over import prices
dude what is your answer is it C? cause i did C.
 

blackvegetable

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Its either B or C, i did Bbyt i see why it could be C But thats the thing about eco, sometimes there is no just one right answer
 

kev-is-red

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Terms of Trade = Price of Imports and Volume of Imports
Price of Exports and Volume of Exports

LEADING EDGE IS wrong when it just says export prices over import prices
Sigh, you really are clutching at straws now.

Export price index
---------------------
Import price index
 
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blackvegetable

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The value of a country's exports relative to that of its imports. It is calculated by dividing the value of exports by the value of imports, then multiplying the result by 100.http://www.investopedia.com/terms/t/terms-of-trade.asp#axzz1c8fGloOy
My point is volume affects the total level of prices hence the tot

Leading edge only says export price index over import price index, It doesn't explain
prices times exports over imports times prices
 

Stalker Ninja

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The value of a country's exports relative to that of its imports. It is calculated by dividing the value of exports by the value of imports, then multiplying the result by 100.http://www.investopedia.com/terms/t/terms-of-trade.asp#axzz1c8fGloOy
My point is volume affects the total level of prices hence the tot

Leading edge only says export price index over import price index, It doesn't explain
prices times exports over imports times prices

Even so, again, the question is asking about reducing the economic impact of a fall in the ToT - which means lower export revenue and a contraction in the economy etcetc. Increasing income tax rates (B) would act to aggravate the impact, thus further worsening standards of living etc
 

rayy_bann

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Would someone be kind enough to post all the answers again since there have been 'changes' to what the general consensus of answers are lol. I'm kinda getting confused on what questions we're discussing. Thanks!
 

Stalker Ninja

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Would someone be kind enough to post all the answers again since there have been 'changes' to what the general consensus of answers are lol. I'm kinda getting confused on what questions we're discussing. Thanks!
1. C
2. A
3. C
4. D
5. A
6. B
7. Debated- I say C
8. A
9. D
10. C
11. B
12. D
13. C
14. B
15. B
16. B
17. D
18. D
19. B
20. C
 

Freddici

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As much as people will argue/debate there is no possible way to know the correct answer until it comes from the BOS itself.
 

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