2011 MC Questions Help (1 Viewer)

[HecticSandWitch]

Usuall do alright but really struggled in 2011 MC.

Help with these questions please!

http://imgur.com/a/s481K

ANswers are C and D respectively.

EDIT: NVM 17, worked it out, importers don't get the extra 5, that's gvt revenue. Can someone still explain 10 please. Is it just a process of elimination?

 

[Ekman]

For the first question:
A is wrong as an increase in foreign imports will cause an increase in supply of AUD, which is opposite of what is going on in the graph. B is wrong as an increase in foreign investment into Australia will cause an increase in demand for AUD. D is wrong as a decline in international competitiveness will cause decrease in demand for AUD. C is correct because a reduction in the net income deficit means less money is flowing out, resulting in less AUD being on the FOREX market, as indicated in the diagram.

For the second Question:
The income foreign businesses will be earning is 10*300 = 3000
After the tax, the revenue generated by foreigners will be 15*100 = 1500
However the government take 500 from this revenue as they are taxing that 100 goods that are being imported at a rate of $5.
Hence $1000 remain as income for foreign businesses after tax.
3000-1000 = 2000 Hence D

 

[HecticSandWitch]

For the first question:
A is wrong as an increase in foreign imports will cause an increase in supply of AUD, which is opposite of what is going on in the graph. B is wrong as an increase in foreign investment into Australia will cause an increase in demand for AUD. D is wrong as a decline in international competitiveness will cause decrease in demand for AUD. C is correct because a reduction in the net income deficit means less money is flowing out, resulting in less AUD being on the FOREX market, as indicated in the diagram.

For the second Question:
The income foreign businesses will be earning is 10*300 = 3000
After the tax, the revenue generated by foreigners will be 15*100 = 1500
However the government take 500 from this revenue as they are taxing that 100 goods that are being imported at a rate of $5.
Hence $1000 remain as income for foreign businesses after tax.
3000-1000 = 2000 Hence D

Thanks so much dude, just couldn't see the link between net income and FOREX but now I see it

EDIT: 'You must spread some Reputation around before giving it to Ekman again.'