Economics Marathon (2 Viewers)

[aphorae]

1 financial instability
- discourages investment
- weakened consumer confidence
- limits prospects for sustained growth

2.

to artificially maintain competitiveness of exports
eg regularly growth is high leads to an appreciation which would shrink export sales and reduce growth
but by keeping exch rate low the bank can allow economy to have sustained growth

3.
-will deplete reserves of foreign currency/gold
-then can cause collapse of currency's value

Excellent!

Also, with 3, you could say that fixed exchange rates would require government intervention to deal with the balance of payments. So if there happens to be a deficit then the govt has to reduce AD which may be a risk, depending. You could also say that because the bank needs to focus on maintaining the currency at a fixed level, it may affect other policy decisions, e.g. reduce the effectiveness of monetary policy in addressing inflation (as it now has to consider the effect on the exchange rate, which shouldn't be its primary concern).

 

[aphorae]

1. Briefly outline how government policies can contribute to a sustainable rate of economic growth (3 marks).

2. Discuss the effect of a decrease in government spending on the level of aggregate demand and economic growth (3 marks).

3. Discuss the role of government policies on increasing aggregate supply (3 marks).

 

[forthehsc]

1. Briefly outline how government policies can contribute to a sustainable rate of economic growth (3 marks).

2. Discuss the effect of a decrease in government spending on the level of aggregate demand and economic growth (3 marks).

3. Discuss the role of government policies on increasing aggregate supply (3 marks).

Q2 - A decrease on govt spending negatively impacts AD. As govt decrease their spending this represents a leakage from the circular flow of income. As a result AD is decreased within an economy. Lower levels of AD result in a decrease in economic growth as there is limited demand

Q3 - Aggregate supply can be increased through microeconomic policies. These are policies that are aimed at individual industries, seeking to increase aggregate supply by improving the efficiency and productivity of producers.
Microeconomic policies promote structural change through making factor and product markets work more efficiently

 

[aphorae]

Q2 - A decrease on govt spending negatively impacts AD. As govt decrease their spending this represents a leakage from the circular flow of income. As a result AD is decreased within an economy. Lower levels of AD result in a decrease in economic growth as there is limited demand

Q3 - Aggregate supply can be increased through microeconomic policies. These are policies that are aimed at individual industries, seeking to increase aggregate supply by improving the efficiency and productivity of producers.
Microeconomic policies promote structural change through making factor and product markets work more efficiently

Great. For Q1 you would just talk about macro/micro.

1. Explain the meaning of the term 'natural rate of unemployment'. (2 marks)

2. Explain two strategies that governments can use to encourage firms to internalise the impacts of externalities. (4 marks)

 

[hup]

Great. For Q1 you would just talk about macro/micro.

1. Explain the meaning of the term 'natural rate of unemployment'. (2 marks)

2. Explain two strategies that governments can use to encourage firms to internalise the impacts of externalities. (4 marks)

1.
the rate of unemployment at which there is zero cyclical unemployment. the remainging rate is made up of structural, seasonal, frictional etc forms of unemployment which will always exist.
its now nairu in the syllabus though natural rate has been crossed out

2.
-imposing tax on pollution
-puts cost on original 'free' pollution
-more pollution corresponds to more cost
-externality is now internalised

cant think of another one lol

 

[ginger1]

The net income deficit is also caused by structural factors. One structural problem is Australia’s high net foreign liabilities, and the servicing costs associated with those liabilities. It is no surprise that this figure has grown in line with Australia’s mounting borrowings from the rest of the world, both public and private. Property sector borrowings in particular have increased Australia’s foreign liabilities and servicing costs. High foreign liabilities has also risen due to persistent CADs, which require an inflow of foreign funds to match the deficit. This then increases the interest payments, or servicing cost, of that debt, thus exacerbating the CAD further. This is a self-perpetuating cycle called the ‘debt trap scenario’.

The second structural cause of Australia’s massive net income deficit is our lack of national savings, which means an inability to meet investment needs. If there is a public sector deficit (PSD), as there in Australia, this places even greater pressure on available savings. A PSD can lead to ‘crowding out’, whereby Australians are forced offshore to borrow necessary funds. Currently, as illustrated below, Australia’s investment level is 25%, while our savings level is 19%. The 6% gap between the two has to be funded by an inflow of funds from overseas, which must be matched by a 6% debit in net income on the current account.

ur a dumb shit

 

[Galladrim]

ur a dumb shit

Seems like a perfectly good answer to me. Please don't troll

 

[powlmao]

Seems like a perfectly good answer to me. Please don't troll

You haven't been here long enough to understand the troll of 'Matty G'

 

[aphorae]

1.
the rate of unemployment at which there is zero cyclical unemployment. the remainging rate is made up of structural, seasonal, frictional etc forms of unemployment which will always exist.
its now nairu in the syllabus though natural rate has been crossed out

2.
-imposing tax on pollution
-puts cost on original 'free' pollution
-more pollution corresponds to more cost
-externality is now internalised

cant think of another one lol

cool

can't think of another one either, maybe after english lol. maybe they can fund money for environmentally friendly technologies? is that internalising though? I have no idea.

 

[krnofdrg]

Can anyone help me on how to structure a generic essay on microeconomic policy?

I know so far i have to talk about efficiency.

Mention National competition policy 1995, deregulation and etc.

It would be great if you can help!! ty~

 

[powlmao]

Can anyone help me on how to structure a generic essay on microeconomic policy?

I know so far i have to talk about efficiency.

Mention National competition policy 1995, deregulation and etc.

It would be great if you can help!! ty~

Isn't it hard to structure genric essays for economcs??

 

[krnofdrg]

Isn't it hard to structure genric essays for economcs??

Not really. I write them all the time and elaborate on them for different Qs. It worked for monetary and fiscal before! Also economic growth!

 

[aphorae]

Can anyone help me on how to structure a generic essay on microeconomic policy?

I know so far i have to talk about efficiency.

Mention National competition policy 1995, deregulation and etc.

It would be great if you can help!! ty~

not sure what is included in the 'etc' part but other components include labour, trade, infrastructure policy, and to an extent taxation/welfare although that can be linked to fiscal

efficiency, productivity and international competitiveness should be the 3 main concepts.

 

[krnofdrg]

not sure what is included in the 'etc' part but other components include labour, trade, infrastructure policy, and to an extent taxation/welfare although that can be linked to fiscal

efficiency, productivity and international competitiveness should be the 3 main concepts.

Do you have any essays or structures you could possibly share with me ?

 

[aphorae]

Do you have any essays or structures you could possibly share with me ?

I don't write any essays for eco, just wing/think about them.

Depending on the exact question, there are possibly two different ways I would consider taking, but ultimately I think it's just easier for me to separate it into the different kinds of microeconomic reform i.e. P1 background/trends, P2 trade, P3 deregulation, P4 etc. labour, infrastructure, competition (+ taxation/welfare if I had time)
^ and trends/effects/info under each one
^ you can also do it via the effects, so you can talk about how it would P1 affect economic growth, etc. but because I wing my essays/think as I write, I'd probably forget a policy if I did it that way, so I would personally structure via policies lol

Micro's pretty generic, I'm sure you can do it if you've done a macro!

 

[aphorae]

New question:

Outline an appropriate fiscal and monetary policy mix to the government to achieve internal and external balance in the short to medium term (4 marks)

dot points or w/e is fine

 

[krnofdrg]

I don't write any essays for eco, just wing/think about them.

Depending on the exact question, there are possibly two different ways I would consider taking, but ultimately I think it's just easier for me to separate it into the different kinds of microeconomic reform i.e. P1 background/trends, P2 trade, P3 deregulation, P4 etc. labour, infrastructure, competition (+ taxation/welfare if I had time)
^ and trends/effects/info under each one
^ you can also do it via the effects, so you can talk about how it would P1 affect economic growth, etc. but because I wing my essays/think as I write, I'd probably forget a policy if I did it that way, so I would personally structure via policies lol

Micro's pretty generic, I'm sure you can do it if you've done a macro!

Oh okay!! Thanks yes this is what structure my teacher recommended also! Cheers

 

[aphorae]

Oh okay!! Thanks yes this is what structure my teacher recommended also! Cheers

np have fun preparing

 

[vexing_sv]

Outline an appropriate fiscal and monetary policy mix to the government to achieve internal and external balance in the short to medium term (4 marks)

I'm a bit iffy answering policy questions which is probably why I'm giving this a shot S: bear with me

FP:
during periods of low economic activity, govt can undertake discretionary measures to increase G and/or lower T (expansionary stance) as was the case during the GFC where the Rudd govt handed out stimulus packages, tax breaks and deposit guarantee schemes ---> Australian economy was responsive to these changes, avoiding a technical recession and detrimental UE levels

FP can also assist external balance through promoting savings and boosting G in education and infrastructure ("Building Australia's Future Workforce" proposal in 2011-12 budget). These increase an economy's LT productive capacity -- funds for domestic investment -- less need to borrow from overseas --> improved NFD and CAD. Also increased human capital increases our IC --> greater X sales --> improved BOGS

MP:
Alternatively during periods of low ec. activity, RBA can adopt an easing stance on MP --> lowering cash rate, encouraging consumption, investment -- boosting AD --> increased demand for labour.

Can also influence external balance (although this is usually indirectly). A fall in "r" discourages investment in Aust. as domestic investments generate lower returns --> depreciation --> greater IC --> in the LT there will be an improvement in BOGS as X sales increase and demand for now expensive Ms falls

Explain the Consequences of net foreign liabilities on the Australian economy

 

[aphorae]

I'm a bit iffy answering policy questions which is probably why I'm giving this a shot S: bear with me

FP:
during periods of low economic activity, govt can undertake discretionary measures to increase G and/or lower T (expansionary stance) as was the case during the GFC where the Rudd govt handed out stimulus packages, tax breaks and deposit guarantee schemes ---> Australian economy was responsive to these changes, avoiding a technical recession and detrimental UE levels

FP can also assist external balance through promoting savings and boosting G in education and infrastructure ("Building Australia's Future Workforce" proposal in 2011-12 budget). These increase an economy's LT productive capacity -- funds for domestic investment -- less need to borrow from overseas --> improved NFD and CAD. Also increased human capital increases our IC --> greater X sales --> improved BOGS

MP:
Alternatively during periods of low ec. activity, RBA can adopt an easing stance on MP --> lowering cash rate, encouraging consumption, investment -- boosting AD --> increased demand for labour.

Can also influence external balance (although this is usually indirectly). A fall in "r" discourages investment in Aust. as domestic investments generate lower returns --> depreciation --> greater IC --> in the LT there will be an improvement in BOGS as X sales increase and demand for now expensive Ms falls

Explain the Consequences of net foreign liabilities on the Australian economy

This is pretty good, although to make it clearer for FP I would've said increased G -> increased consumption/increased AD (C+I+G+(X-M)) -> increased derived demand for labour. "Australian economy was responsive to these changes" isn't specific enough; the question is "how does increased G lead to avoiding detrimental UE levels?" - take them through the whole process.

Okay, just noticed you did that in MP Yeah, you should do the same thing for FP.

Noticed you didn't mention inflation? That'd probably be an important one rather than external balance in MP, since the question asks outline an appropriate policy mix, and MP shouldn't be used to target the exchange rate/external balance. Instead you could say that the use of a target band in managing interest rates allows for transparency which means containing inflationary expectations. Or just simply interest rates themselves affecting inflation.

gj otherwise though

p.s. another option for fp would be 'fiscal consolidation' to return the budget to surplus to lower the burden on debt servicing overseas/nfl/cad but what you have already is cool too