Explain the relationship between unemployment and inflation in the short and long run - 5 marks
Describe the ways the labour force participation rate would increase - 3 marks
Mate churn those questions outDescribe the difference between a bilateral exchange rate and the trade weighted index - 2 marks
Believe me, I have more awesome ones, but ill save them for another time (such as before HSC)Mate churn those questions out
For the first question, I'll use a theoretical situation to describe it:Can someone explain this to me:
http://www4.boardofstudies.nsw.edu....wer=A&courseID=15110&testQuestionID=343646573
EDIT: And this too please:
http://www4.boardofstudies.nsw.edu....wer=B&courseID=15110&testQuestionID=343647900
Ah I see now, so the question is basically saying that when individuals get retrenched and no longer seek work, the labour force decreases and the unemployment rate stays the same. ThanksFor the first question, I'll use a theoretical situation to describe it:
Suppose you have an economy with a working age population of 10 people: 6 are employed, 2 are unemployed.
Therefore the labour force has 8 people and the unemployment rate will be 25%.
If one of the employed persons has their job retrenched, and they no longer actively seek employment, then 5 will be employed and 2 unemployed. Therefore the labour force has only 7 people now (smaller) and the unemployment rate will be 28.6% (higher).
For the second question, B, C and D all describe situations of a market operating properly (clear property rights, social costs considered, negative externalities added to market price). Therefore, A describes a feature of market failure. This is because public goods cannot be allocated to maximum efficiency since it's hard to find the optimum price and quantity.
It should increase, because the amount of people employed decreases while the amount of people unemployed stays the same. So the proportion of unemployed people to the labour force increases, i.e. unemployment rate increases (like in my example: 2 from 8, or 25%, to 2 from 7, or 28.6%).Ah I see now, so the question is basically saying that when individuals get retrenched and no longer seek work, the labour force decreases and the unemployment rate stays the same. Thanks
Yeah, sorry poor wording lol.It should increase, because the amount of people employed decreases while the amount of people unemployed stays the same. So the proportion of unemployed people to the labour force increases, i.e. unemployment rate increases (like in my example: 2 from 8, or 25%, to 2 from 7, or 28.6%).
hahaha, no worries, just thought I'd make sure!Yeah, sorry poor wording lol.
Increase in investment would lead to an increase in the level of national income (increase in investment leads to an increase in AD and thus GDP). Thus this continual increase in aggregate demand would cause an increase in the multiplier (increase in AD leads to increase in C and thus MPC will rise and cause an increase in the multiplier)Explain how an increase in autonomous investment can have a multiplier effect on the level of income in an economy - 3 marks
Your wording seems a little confusing, here is my response:Increase in investment would lead to an increase in the level of national income (increase in investment leads to an increase in AD and thus GDP). Thus this continual increase in aggregate demand would cause an increase in the multiplier (increase in AD leads to increase in C and thus MPC will rise and cause an increase in the multiplier)
Really not sure about this...
The “autonomous investment” bit confused me because I thought autonomous investment and consumption and only induced consumption and investment doesn’t affect the MPC.
This questions seems a bit weird because GNI per capita is taken into consideration when developing the HDI. The only thing that comes to my mind is that:Explain why countries may have similar Human Development Index Levels but very different GNI per capita (2 marks)
That doesn't make sense, because GNI per capita is measured by dividing the total income by the population. Are you sure the question didn't ask about the GINI coefficient, because then the question would make sense.Yeah I thought it was weird too. This is what I wrote:
The Human development index of economies may be similar due to the similar educational levels and literacy rate and similar life expectancies.
However, GNI may be different due to the lack of social welfare and unequal distribution of income. An economy’s exchange rate may also cause distortions in the GNI measurements.