A Lot of Questions (1 Viewer)

[always_smile]

I have answered the following questions but i don't know if i have answered them right. Can somebody please tell me what they world include in the answers so that i can mark my work. Thanks in advance. Sorry to be a bother.

1. Explain how micro reform can bring about stryctural change in Australia.
2. Explain 2 probelms associated with mirco reform in Australia.
3. Outline how the simple multiplier can affect economic activity.
4. Outline 2 possible causes of the fall in the participation rate for an economy.
5. Describe 2 problems associated with structural change in the Australian economy.
6. Explain how deregulation may promote productivity growth in the Aust'n economy.
7. Briefly describe the causes of Australia's on-going CAD and its effects on external stability.
8.Explain the role of microeconomic policies in complementing the government's macroeconomic policies.

Thanks heaps.

Can somebody also show me please how to answer the following m/c question.

From 2004 HSC
an increase in investment expenditure of $100m changes the equilibrium level of national income by $250m. What is the size of the MPC?
a) 0.4
b)0.6
c)1.25
d)2.50

answer is b and i do not understand how to get it.

 

[Jago]

simple multiplier = 1/ (1 - MPC) = 250m/100m = 5/2

.'. 1 - MPC = 2/5

MPC = 3/5 = 0.6 (yay maths)

 

[sk8ie_boi]

I have answered the following questions but i don't know if i have answered them right. Can somebody please tell me what they world include in the answers so that i can mark my work. Thanks in advance. Sorry to be a bother.

1. Explain how micro reform can bring about stryctural change in Australia.
2. Explain 2 probelms associated with mirco reform in Australia.
3. Outline how the simple multiplier can affect economic activity.
4. Outline 2 possible causes of the fall in the participation rate for an economy.
5. Describe 2 problems associated with structural change in the Australian economy.
6. Explain how deregulation may promote productivity growth in the Aust'n economy.
7. Briefly describe the causes of Australia's on-going CAD and its effects on external stability.
8.Explain the role of microeconomic policies in complementing the government's macroeconomic policies.

Thanks heaps.

Can somebody also show me please how to answer the following m/c question.

From 2004 HSC
an increase in investment expenditure of $100m changes the equilibrium level of national income by $250m. What is the size of the MPC?
a) 0.4
b)0.6
c)1.25
d)2.50

answer is b and i do not understand how to get it.

I remember doing these questions hehe ..

1. structural change can be in *product market = introducing competition e.g. optus; taxation reform e.g. GST to increase incentives *factor mark = workplace reform e.g. the one atm or workplace relations act 1996

2. problems of micro reform is an increase in umemployment in the short run, as technology takes the jobs of workers..

3. simple mulitplier can boost economic activity as money is injected into the circular flow ..

4. fall in participation rate can be caused by a downturn in economic growth, as people are too lazy to find jobs, since there aren't any ... and ...the aging population ..

5. structural change is the same as micro reform? .. so increase in unemployment in the short run .. and i can't fink of anything else

6. deregulation means incentive .. and will increase productivity and improve economic growth... (not sure about dis one)

7. hehe i like dis one, i just did an essay on current account deficit .. well .. it's caused by too much imports and not enough exports, so recently .. it's the causes of the slowdown of the global economy which reduced export demands, the drought in australia, reduced arguiculture exports and lastly australia's strong ecnomic growth over the years meant .. strong demand for imports and of course there's a lot more .. but these are the recent causes...

8. macro deals wif short term economic problems while mirco deals with long term, therefore both must be used together to achieve the goals ...

umm i hope dat helps ..

 

[sunjet]

1. Explain how micro reform can bring about stryctural change in Australia.

- Making industries more efficient changes their production patterns.

2. Explain 2 probelms associated with mirco reform in Australia.

- Short term structural unemployment as businesses made more competitive.
- It is a long-term policy, thus the benefits take time.

3. Outline how the simple multiplier can affect economic activity.

- Change in Income = Multiplier x change in AD

4. Outline 2 possible causes of the fall in the participation rate for an economy.

- Increase in school retention rates.
- Decrease in retirement age.
- Reduced government initiatives

5. Describe 2 problems associated with structural change in the Australian economy.

- Workers need to acquire new skills and familiarise themsleves with the new processes of production.
- People often resist change by nature.
- Short term unemployment, reduction in growth in the short term, increase in the CAD in the short term.

6. Explain how deregulation may promote productivity growth in the Aust'n economy.

- Deregulation involves the removal of rules that constrain the operation of market forces. Dergulatoin in the financial sector has led to increase competition, increased productivity allowing them to become effienct and operate, for example Impulse/Virgin Airlines and Optus in the telecommunications industry. In the labour market, an increase in productivity has resulted in return for higher wages.


7. Briefly describe the causes of Australia's on-going CAD and its effects on external stability.

- Low level of national savings
- Poor TOT/Narrow export base
- Net foreign liabilities
- Effect: Fall in credit rating as foreign investors will be less likely to lend funds, which made lead to less growth, higher IR rates and exchange rate volatility, thus affecting external balance.

8.Explain the role of microeconomic policies in complementing the government's macroeconomic policies.

- The government uses macroeconomic policies to affect AD in the short term to minimise fluctuations in the international business cycle, where as microecnomic policies are used to increase growth in the long term by improving efficiency in supply. Microeconomic policies are used to reduce the CAD and improve externability, which is a constraint on growth, which macroeconomic policies aim to achieve in the short term. Macro policies also keep inflation between 2-3% and microeconomic policies ensure supply keeps up with demand so it doesn't add to inflationary pressures.

 

[always_smile]

Thanks heaps for that. It really helped. Thanks and good luck