HSC 2015 Economics Marathon (3 Viewers)

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

Explain how one macroeconomic policy and one microeconomic policy could be used to improve Australia's external stability position? - 4 marks

Macroeconomic policy:
Discretionary Fiscal policy to mandate superannuation to a fixed percentage of income will increase domestic savings, bridging the savings investment gap to improve external stability in the long term. Fiscal surpluses/smaller deficit targeting will increase public sector savings, improving global investor confidence while also adding to national savings

Microeconomic
Trade liberalisation policy when applied to product markets will improve international competitiveness as efficient industries form in the long term, allowing for X component of BOGS to improve, thus improving external stability.

 

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

Australia is currently experiencing an ageing of its population, with the proportion of Australians aged over 65 expected to grow from 14 per cent of the population in 2010 to 23 per cent by 2050. Discuss the possible impacts of this longer term trend on Australia’s labour market, and the government policies that can be used in response.

5 marks.

 

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

I'm new here btw so If i'm doing anything wrong let me know

 

[Ekman]

Re: 2015 HSC Economics Marathon

Macroeconomic policy:
Discretionary Fiscal policy to mandate superannuation to a fixed percentage of income will increase domestic savings, bridging the savings investment gap to improve external stability in the long term. Fiscal surpluses/smaller deficit targeting will increase public sector savings, improving global investor confidence while also adding to national savings

Microeconomic
Trade liberalisation policy when applied to product markets will improve international competitiveness as efficient industries form in the long term, allowing for X component of BOGS to improve, thus improving external stability.

Although your point about macro policy is correct, I want to clarify something here. The fiscal policy has a macro and micro side to it. You are currently referring to the micro side when the government mandates superannuation. The 'discretionary' changes involves simple changes in the amount of government expenditure and taxation. Mandating superannuation is more supply side (aka micro sided) since it incurs further costs to businesses as they have to pay a certain percentage extra for their employees. So if you are going to say something along the lines of 'discretionary' changes, you need to refer to the Governments aim to budget for a surplus in order to finance its foreign debt and liabilities, by taxing more and reducing government expenditure. So I feel your answer is a bit iffy.

 

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

Thankyou

 

[Ekman]

Re: 2015 HSC Economics Marathon

Australia is currently experiencing an ageing of its population, with the proportion of Australians aged over 65 expected to grow from 14 per cent of the population in 2010 to 23 per cent by 2050. Discuss the possible impacts of this longer term trend on Australia’s labour market, and the government policies that can be used in response.

5 marks.

Damn this is toughie, the only things I can think of are:

Advantages: -It will decrease NAIRU in the long run because the NAIRU consists of structurally and long-term unemployed people, which usually consists of old people aged around 60, because of technological developments requiring new skills. Hence in the longer run, these people who make up a big part of the NAIRU will just retire and hence decrease NAIRU.
-A weak point, but the workforce will be made up of young and highly skilled people who are in touch with the developments of technologies and businesses.

Disadvantages: -The quite obvious one is that there would be a decrease in supply of labour, as more and more people will retire in the longer run.
-This will also cause cost-push inflation as hiring labour will cost more.
-It will also put a constraint on the economic growth, as there would be a limited supply of goods being produced.

Measures Taken: -The government can increase the retirement age and decrease the school leaving age. They can also decrease welfare payments to retirees, encouraging them to go back into the labour force.
-After encouraging the retirees to work again, the government can implement retraining programs to get them working once more.

I know this will probably constitute to about 3 of the 5 marks, but feel free to add.

 

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

Damn this is toughie, the only things I can think of are:

Advantages: -It will decrease NAIRU in the long run because the NAIRU consists of structurally and long-term unemployed people, which usually consists of old people aged around 60, because of technological developments requiring new skills. Hence in the longer run, these people who make up a big part of the NAIRU will just retire and hence decrease NAIRU.
-A weak point, but the workforce will be made up of young and highly skilled people who are in touch with the developments of technologies and businesses.

Disadvantages: -The quite obvious one is that there would be a decrease in supply of labour, as more and more people will retire in the longer run.
-This will also cause cost-push inflation as hiring labour will cost more.
-It will also put a constraint on the economic growth, as there would be a limited supply of goods being produced.

Measures Taken: -The government can increase the retirement age and decrease the school leaving age. They can also decrease welfare payments to retirees, encouraging them to go back into the labour force.
-After encouraging the retirees to work again, the government can implement retraining programs to get them working once more.

I know this will probably constitute to about 3 of the 5 marks, but feel free to add.

Hmm I have a few more
Disadvantage
- decrease in productive capacity due to your point (decrease in supply of labour) therefore limiting growth capacity
- increase taxation on the employed to finance the pensions for the ageing population, decreasing quality of life and utility in the economy

Alternative Measures taken:
-- Increased training programs and education in an emphasis on reducing the number of structurally unemployed, in order to finance the increased aged care/pension numbers incurred by the increased number of retirees

 

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

You already edited them in ahaha

 

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

Describe the Advantages of using the trimmed mean inflation calculation over the weighted median (2 marks)

(Obscure but school trials can be iffy with details)

 

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

Outline 2 supply side factors contributing to unemployment domestically, while providing policies to address them. (4 marks)

 

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

Analyse the impact of inflation on the allocation of resources in the Australian economy (3 marks)

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

Discuss the varying impacts of global protection levels on the agricultural and motor-vehicle industries in Au (4)
Agriculture: Global protection levels in the US, EU and Japan on the agriculture sector puts australian farmers at a great disadvantage. The high levels of subsidies in global markets cause them to have an advantage over Australian farmers and thus their global agriculture markets with subsidies are able to produce more. For example, in the EU, farmers receive 25% of their income or subsidy according to the EU CAP. In the future, it is expected that these agricultural industries products in other economies. Also agricultural industries in Australia will continue to grow in processed foods such as dairy products.
Manufacturing (PMV): The various multilateral and bilateral agreements Australia has joined, has reduced tariffs in this sector. This reduction in protection has had a positive impact of the global market but a negative impact on Australia as Australian PMV firms cannot compete in this sector due to high wages. Eventually this has led to the PMV sector shrinking as by 2017, car manufacturing in Au will cease.

feel free to fix up and add

 

[Ekman]

Re: 2015 HSC Economics Marathon

Discuss the varying impacts of global protection levels on the agricultural and motor-vehicle industries in Au (4)
Agriculture: Global protection levels in the US, EU and Japan on the agriculture sector puts australian farmers at a great disadvantage. The high levels of subsidies in global markets cause them to have an advantage over Australian farmers and thus their global agriculture markets with subsidies are able to produce more. For example, in the EU, farmers receive 25% of their income or subsidy according to the EU CAP. In the future, it is expected that these agricultural industries products in other economies. Also agricultural industries in Australia will continue to grow in processed foods such as dairy products.
Manufacturing (PMV): The various multilateral and bilateral agreements Australia has joined, has reduced tariffs in this sector. This reduction in protection has had a positive impact of the global market but a negative impact on Australia as Australian PMV firms cannot compete in this sector due to high wages. Eventually this has led to the PMV sector shrinking as by 2017, car manufacturing in Au will cease.

feel free to fix up and add

Completely contradictory, you started it off well but then you said that Aussie farmers will be able to growth despite EU and US farmers 'dumping' agricultural products at a cheaper price. I believe you should say that agricultural industries in Aus will slowly fade away, since the global subsidies results in cheaper overseas agricultural products in comparison to Australias. So fix that up and you should be fine.

 

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

Discuss the varying impacts of global protection levels on the agricultural and motor-vehicle industries in Au (4)
Agriculture: Global protection levels in the US, EU and Japan on the agriculture sector puts australian farmers at a great disadvantage. The high levels of subsidies in global markets cause them to have an advantage over Australian farmers and thus their global agriculture markets with subsidies are able to produce more. For example, in the EU, farmers receive 25% of their income or subsidy according to the EU CAP. In the future, it is expected that these agricultural industries products in other economies. Also agricultural industries in Australia will continue to grow in processed foods such as dairy products.
Manufacturing (PMV): The various multilateral and bilateral agreements Australia has joined, has reduced tariffs in this sector. This reduction in protection has had a positive impact of the global market but a negative impact on Australia as Australian PMV firms cannot compete in this sector due to high wages. Eventually this has led to the PMV sector shrinking as by 2017, car manufacturing in Au will cease.

feel free to fix up and add

Maybe use the example of AUSFTA, which has seen the complete erosion of protection of PMV and 67% agriculture to contextualise the argument if it was worth more?

 

[Ekman]

Re: 2015 HSC Economics Marathon

Outline 2 supply side factors contributing to unemployment domestically, while providing policies to address them. (4 marks)

-Increase in productivity
-Increase in wage levels
-Decrease in the diversification of industries in an economy, resulting in structural unemployment
-Decrease of people looking for jobs, resulting in a discouragement for those who are hidden unemployed.
-Decrease in productivity of employment agencies, causing frictional unemployment to rise and may lead to long-term

Policies that address this:
-Retraining programs
-Expansionary macro policies that make the economic conditions more favourable
-Microeconomic reform
-Subsidising employment agencies

 

[Ekman]

Re: 2015 HSC Economics Marathon

Analyse the impact of inflation on the allocation of resources in the Australian economy (3 marks)

Inflation will lead to a better allocation of resources. Reasons being is this:
-Inflation will cause an increase in prices, resulting in weak, import-competing industries to go about of business because of a reduction in international competitiveness, resulting in short-term structural unemployment and a better allocation of resources into better industries that can compete on an international scale.
-Plus inflationary pressures with cost-push inflation (because of workers demand for more wages), will cause the weaker businesses to go out of business because of increased costs.

 

[Gabriel Moussa]

Re: 2015 HSC Economics Marathon

Inflation will lead to a better allocation of resources. Reasons being is this:
-Inflation will cause an increase in prices, resulting in weak, import-competing industries to go about of business because of a reduction in international competitiveness, resulting in short-term structural unemployment and a better allocation of resources into better industries that can compete on an international scale.
-Plus inflationary pressures with cost-push inflation (because of workers demand for more wages), will cause the weaker businesses to go out of business because of increased costs.

In another sense, would inflation not lead to a misallocation of resources? People would invest in items that hold their value such as Gold/USD rather than investing them where it is needed in the economy, thereby misallocating resources.
Although your points are solid. Just a question.

 

[Ekman]

Re: 2015 HSC Economics Marathon

In another sense, would inflation not lead to a misallocation of resources? People would invest in items that hold their value such as Gold/USD rather than investing them where it is needed in the economy, thereby misallocating resources.
Although your points are solid. Just a question.

Actually, I have reconsidered my points, and now fully support that inflation will distort the allocation of resources. This is because when prices increase, businesses will believe that it was because of demand factors, and begin to invest in capital and hire more labour. However since inflation has somewhat of a time lag, businesses will be increasing their inputs for no good reason, hence misallocation of resources.

I realised the question is a little ambiguous, as cost-push inflation and demand-pull inflation will have different impacts on resource allocation

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

Discuss the policy options available to the government for increasing Australia’s ability to save (4)

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

Hmm I have a few more
Disadvantage
- decrease in productive capacity due to your point (decrease in supply of labour) therefore limiting growth capacity
- increase taxation on the employed to finance the pensions for the ageing population, decreasing quality of life and utility in the economy

Alternative Measures taken:
-- Increased training programs and education in an emphasis on reducing the number of structurally unemployed, in order to finance the increased aged care/pension numbers incurred by the increased number of retirees

What about adding a sentence or two on how the ageing population will increase the burden on health services (especially public health services) as many individuals are retiring and the workforce is decreasing, placing constraints on the limited health workers and the system overall. So the gov needs to provide funding for extra health services. And linking this to the labour market if the elderly are using up all the health services then this will impact other workers in the economy as if they are not provided with health services, their productivity in the long run might reduce.