Economics game (1 Viewer)

[Zak Ambrose]

Debt an amount owed to a firm for funds borrowed.

Equity ownership of an asset. although i think it can also mean total assets minus total liabilities.


explain how deregulation may promote productivity growth in the Australian economy. (5 marks)

 

[f1r3c4p3]

The government is able to use taxation such as carbon taxes on firms. They are also able to use discretionary fiscal expenditure to put in place new technologies that allow for decreased pollution. They may also implement MER which allow firms to structurally adjust production methods to become more environmentaly friendly and therefore produce lower levels of pollution.

Question: Outline both debt and equity

Debt is external sources of finance while equity is internal sources of finance such as shares.

Question: What benefits would microeconomic reform bring to the Australian economy?

 

[f1r3c4p3]

oops I answered more on debt and equity financing lol

 

[Zak Ambrose]

explain how deregulation may promote productivity growth in the Australian economy. (5 marks)

 

[P.T.F.E]

Wha? Where? Or did she want me to talk about the Balance of Payments?

Just asked my sister: She said that when the AUD appreciates, foreign investment will be lower as Australian assets are more expensive. And vice versa. So opposite of what I said T.T I got confused with Interest rates!

I've got too much Physics in my brain D=

Yer thats right.

 

[P.T.F.E]

Question: What benefits would microeconomic reform bring to the Australian economy?

Microeconomic reform would improve the supply side of economic activity effectively increasing the level of productivity and international competivness. Micro reform will also raise technical, allocative and dynamic efficiency of resources in the economy. through increased productivity it creates sustainable economic growth, reduced unemployment in long term and increases SoL.

Briefly account for the Gini coefficient in Australia over the last decade?

 

[Zak Ambrose]

i think its stayed between 0.25 and 0.35

explain how deregulation may promote productivity growth in the Australian economy. (5 marks)

 

[tedstedsteds]

explain how deregulation may promote productivity growth in the Australian economy. (5 marks)

By opening domestic markets to the global economy increased competition on the market will cause firms to either ensure efficient and productive output or simply go out of business.
In Australia we've experienced an increase in deregulation of trade barriers coupled with export assistance programs and participation in both bi-lateral (CERTA) and Multilateral (APEC-ish?) trade bloc's. This combined with strong microeconomic reform since the mid-1970's has seen Australia become an incredibly internationally competitive nation.
This can be evident as Australia is the 6th most traded currency on the market, heavy deregulation has also seen massive global ties in our finance sector.
It's important to note that our Textiles, Motor and clothing industries still receive protection but protectionist policies in these sectors are being deregulated and should be transparent by 2015.
Overall the global economy has allowed Australia to specialise in several industries and become an economically competitive nation (which is suprising for a nation with such a small population).


ish i'm blabbering at this point, i hope thats not a 5 marker

 

[tian1chen]

that is a hard question been trying to look for the current figures online, but i can't seem to find them. nope found some but they aren't up to date which is sad.

However i would say there has been a slight upward trend in the gini coefficient in this decade, due to the commodity boom and cuts to the taxes rates which allow more wealth build up for the rich, but it has been kept low enough due to increasing of transfer payments for the lower classes and the income of the government has been increased to allow for these payments.



Briefly explain how monetary policy can influence inflationary expectations

 

[Scrub Ya Flaps]

Microeconomic reform would improve the supply side of economic activity effectively increasing the level of productivity and international competivness. Micro reform will also raise technical, allocative and dynamic efficiency of resources in the economy. through increased productivity it creates sustainable economic growth, reduced unemployment in long term and increases SoL.

Briefly account for the Gini coefficient in Australia over the last decade?

The Gini co-efficient is a mathematical expression of the degree of inequality in the distributive of income. The value is always between 0 and 1. The higher the G's value the greater the inequality (of income). LOL just a meaning (good for studying)

Over the last 10 years the Gini co-efficient has fluctuated with changes in the business cycle. In 1999-2000 the GC was 0.310, before falling back to 0.307 in 2005-6. This indicated a reduction in income inequality of about 1.3% between 1997-1998 and 2005-2006. The ABS attributed this reduction in income inequality to the introdution of new welfare payments to families and carers, and modest tax cuts in the 2004 federal budget.

I'm not to sure of the lastest GC but if they did ask a question like that they would have to give a table, hence myself using a textbook for help.

i was late in answering so do whatever the next question was by ZAK

 

[Scrub Ya Flaps]

ish i'm blabbering at this point, i hope thats not a 5 marker

Haha it says (5 marks) but i thought your answer was alright since im not to familair with deregulation... i thought it was also the financial markets.. my teacher kept saying the Rudd was trying to state that we have 'regulated finacnial systems' alluding to that of the banks passing on rate drops by the RBA but since (not sure when, 80-90's.. hopefully someone can tell me) Australian financial systems have been deregualted and DON'T need to pass on rate drops...

NO IDEA IF THIS MAKES SENSE OR IF IT'S RELEVANT.. JUST REMEMBER MY TEACHER SAYING IT. HAHA HE GOT ANNOYED, i hate economics teachers!

 

[Scrub Ya Flaps]

Briefly explain how monetary policy can influence inflationary expectations

Monetary policy refers to how (in aust's case) the RBA controls money, the RBA attempts to achieve'
(a) the stability of the currency of Australia;
(b) the maintenance of full employment in Australia; and
(c) the economic prosperity and welfare of the people of Australia." (RBA WEBSITE)

If the RBA eases monetary policy through open market operations the RBA is essentially injecting more cash into the market in exchange for the selling of CGS and "repo's", an increase in cash in the cash market, and lower cash rate's and other interest rates that make up the yield curve will follow. With the increase of cash in the market, inflationary expectations are lowered as consumer are more relaxed and have more positive perceptions of future inflation as they have more 'cash in the hand'. This was a bit long already and i wouldnt write so much in the exam but in essence its vice-versa for tightening monetary polciy... I HOPE... lol as you can tell i'm not confident in putting answers up but i think its helping.. feel free to disagree and add PLEASE! haha

o yeah another question haha..
Briefly describe the alternative ways of financing a budget deficit and it's impact on the Australian economy... GO!

 

[Nikkay75]

Briefly describe the alternative ways of financing a budget deficit and it's impact on the Australian economy... GO!

Borrowing from the private sector through the sales of CGS (Commonwealth Government Securities) in the domestic financial markets. The notion of a "tap and tender" system where you can 'turn on' or 'turn off' as funding is required.

Borrowing from the RBA through the "printing press" method where the Government has increased spending capabilities without private sector having less. This can potentially result in inflationary pressure.

Borrowing from foreign lenders, this places no pressure on domestic interest rates to rise. There are implications for the exchange rate, debt and future Current Account Deficits in the Balance of Payments.

What are Australia's economic objectives?

 

[AnandDNA]

Monetary policy refers to how (in aust's case) the RBA controls money, the RBA attempts to achieve'
(a) the stability of the currency of Australia;
(b) the maintenance of full employment in Australia; and
(c) the economic prosperity and welfare of the people of Australia." (RBA WEBSITE)

If the RBA eases monetary policy through open market operations the RBA is essentially injecting more cash into the market in exchange for the selling of CGS and "repo's", an increase in cash in the cash market, and lower cash rate's and other interest rates that make up the yield curve will follow. With the increase of cash in the market, inflationary expectations are lowered as consumer are more relaxed and have more positive perceptions of future inflation as they have more 'cash in the hand'. This was a bit long already and i wouldnt write so much in the exam but in essence its vice-versa for tightening monetary polciy... I HOPE... lol as you can tell i'm not confident in putting answers up but i think its helping.. feel free to disagree and add PLEASE! haha

o yeah another question haha..
Briefly describe the alternative ways of financing a budget deficit and it's impact on the Australian economy... GO!

I thought Inflationary expectations would rise as people have more money in their hands (demand-pulled inflation)

 

[gabgab]

What are Australia's economic objectives?

1) Strong economic growth
2) Full employment
3) Price stability/ low inflation
4)External stability
5) Income equality
6) Environmental management.

These can be grouped into 3 main groups:
- Economic Growth
- Internal stability
- External Stability



Identify the main sources of wealth in the Australian economy.

 

[Scrub Ya Flaps]

What are Australia's economic objectives?

i think i'll get this wrong, either way im going to put my answer then look it up and put it in with an EDIT. kk, not sure how many though haha im gonna guess 6

1.External stability
2.Price stability
3.Economic Growth
4.Environmentally Sustainable Development???? not sure bout this one
5.Increasing international competitiveness
6. i guessed 5 so ima look up what they are then post another Q
------------------------------------------------------------------------------------
Couldnt really find it EXACTLY but..

1. Economic growth. i got that
2. Full employment i got that to
3. Price stabily on a roll
4. External balance it'll end soon
5. ESD not yet but
6. Equitable distributuon of income told you it would end
7. dont have naymore in book. ARE THERE ANY? haha im hoping you know the answer to YOUR question.. go me

 

[AnandDNA]

What are Australia's economic objectives?[/quote]

-Sustainable level of economic growth
-Full employment
-Inflation between 2-3%
-external stability
-an apporpriate inequality in distribution of income and wealth <<<<< nt sure help me out

-Ecologically sustainable development

By using examples, explain the impacts of tax reforms in achieving Australia's economic objectives ??

 

[tian1chen]

ways of financial a deficit are loans to the private and public sectors, usually in the terms of bonds, selling of government assets, borrowing from overseas and printing money lots and lots of it yah.

borrowing or loans from the private and public sectors can be bad if the amount is large as this cause a crowding out effect where businesses are unable to borrow funds due to decrease in supply, therefore a increase in prices. this means that Australia economic growth will weaken as business are unable to fund investments.

Selling of government assets is one of the best ways of funding a deficit in economic terms, as it allows governments to gain the money they need and it also allows the public company to be privatised thereby increasing competitiveness.

Borrowing from overseas can also be problematic if the loans is to large and the interest payment will also be large, however it would be alright if the outflow in income is less the the extra generated income then would otherwise be possible without the loan. A example of it being bad or going bad is Brazil in the 1990's, this meant there was a vulnerability to external shocks.

Printing money one of the worst and possibly the less use can cause high loss in consumer confidence in the currency, high inflation, which would restrict grow, this can even spiral out of control with hyperinflation e.g Zimbabwe. However it can be used in moderation certain extreme case where inflation in extremely low and growth is low such as England now.

 

[tian1chen]

Name the three main global organisation to do with economics and their roles within the global community?

 

[AnandDNA]

Wha? Where? Or did she want me to talk about the Balance of Payments?

Just asked my sister: She said that when the AUD appreciates, foreign investment will be lower as Australian assets are more expensive. And vice versa. So opposite of what I said T.T I got confused with Interest rates!

I've got too much Physics in my brain D=

So does an appreciation benefit or worsen the CAD as there is increased spending on imports but decline in foreign inflow

Or similarly

would a decrease in interest rates benefit or worsen the CAD (because of the same reasons above)???