Economics Marathon (3 Viewers)

[vexing_sv]

Thanks for your points always forget to mention the obvious -facepalm- :\

anymore questions I could have a go at?

 

[aphorae]

Thanks for your points always forget to mention the obvious -facepalm- :\

anymore questions I could have a go at?

np

... your own? Rofl, I'm bad at trying to think of what to say for general questions, personally I find specific questions easier

Explain the Consequences of net foreign liabilities on the Australian economy
1. High NFL = increased interest repayments and/or dividends = debit on NPY = worsening CAD
2. Unserviceable NFL or unsustainable CAD, as well as possible debt trap scenario = external instability
3. Also high CAD = constraint on economic growth and hence the other objectives

Is there anything else? Idk, are those the obvious ones or are there others?

 

[aphorae]

Here's another one

Evaluate the effectiveness of macroeconomic policies and labour market reforms in reducing Australia's rate of unemployment. (5 marks)

^ dot points again is fine

 

[vexing_sv]

Explain the Consequences of net foreign liabilities on the Australian economy
1. High NFL = increased interest repayments and/or dividends = debit on NPY = worsening CAD
2. Unserviceable NFL or unsustainable CAD, as well as possible debt trap scenario = external instability
3. Also high CAD = constraint on economic growth and hence the other objectives

Is there anything else? Idk, are those the obvious ones or are there others?

those are the obvious ones. Others would include, loss of investor confidence which could trigger capital flight --> destabilising the economy. Also defaults on debt repayments --> lower the credit rating --> overseas lenders impose higher interest rates --> further increases servicing costs and makes it harder to borrow overseas funds for domestic investment

Evaluate the effectiveness of macroeconomic policies and labour market reforms in reducing Australia's rate of unemployment.

Macro:
MP: can undertake expansionary stance -- lower "r" -- cheaper to borrow -- increases disposable Y levels + business loans --> more consumption +investment -- more AD -- increased derived demand for labour and therefore lower UE.
Effectiveness: more effective at slowing the economy than stimulating it to encourage employment. therefore not the most effective policy tool in reducing Aust. UE

FP: expansionary stance -- more G, less T -- greater disposable incomes -- more AD and demand for labour -- less UE.
Also LT fiscal spending in infrastructure projects in ports, telecommunications, railways -- increases demand for labour. Also increases the future efficiency of X delivery, increasing International competitiveness and future demand for labour
Also recently incentives to hire LT unemployed by granting subsidies to employers

Effectivessness: more effective at stimulating the economy and encouraging employment -- important policy tool in lowering UE

However macro policies mainly address cyclical UE and effectiveness in lowering UE is limited by the NAIRU - supply constraint of labour. therefore LM reforms play important role in reducing NAIRU and long term UE rate

1) Flexibility and efficiency of the labour market -- decentralised system -- wage rises linked to productivity -- less pressure on wages -- cheaper to hire labour -- less UE
Also less union power and less stringent unfair dismissal laws makes labour more attractive resource. However this involves a trade-off in worker rights and is politically unpopular eg. Howard Workchoices

2) increasing efficiency of employment finding agencies eg. Job Network -- lower time lags associated with finding new work (frictional UE) and prevent substantial loss of skills which could make labour less employable

3) Increased funding in education and training -- build up skills of workforce -- more employable esp. in Aust. service based economy.
However as skills increase, wages increase -- labour may outprice itself or move to locations with lower marginal income tax rates -- brain drain

4) tax incentives -- eg. increasing the lower income Earner's tax offset -- increases motivation to work and participation rate -- leading to fall in UE in medium - long term

5) Mutual obligation schemes eg. work for the dole. allows welfare workers to retain job skills -- making them more employable in the medium term
However individuals may feel stigmatised in the workforce and hence become reliant on welfare payments

Wow. yep. that is way too long for a 5 marker S: what would you say is irrelevant?

Describe the factors affecting Aust. TOT and the impact of an improvement in the TOT on the BOP. (4marks)

 

[powlmao]

Here is a go one

Explain the economic benefits of the government 'Education revolution' scheme.

 

[aphorae]

those are the obvious ones. Others would include, loss of investor confidence which could trigger capital flight --> destabilising the economy. Also defaults on debt repayments --> lower the credit rating --> overseas lenders impose higher interest rates --> further increases servicing costs and makes it harder to borrow overseas funds for domestic investment

Evaluate the effectiveness of macroeconomic policies and labour market reforms in reducing Australia's rate of unemployment.

Macro:
MP: can undertake expansionary stance -- lower "r" -- cheaper to borrow -- increases disposable Y levels + business loans --> more consumption +investment -- more AD -- increased derived demand for labour and therefore lower UE.
Effectiveness: more effective at slowing the economy than stimulating it to encourage employment. therefore not the most effective policy tool in reducing Aust. UE

FP: expansionary stance -- more G, less T -- greater disposable incomes -- more AD and demand for labour -- less UE.
Also LT fiscal spending in infrastructure projects in ports, telecommunications, railways -- increases demand for labour. Also increases the future efficiency of X delivery, increasing International competitiveness and future demand for labour
Also recently incentives to hire LT unemployed by granting subsidies to employers

Effectivessness: more effective at stimulating the economy and encouraging employment -- important policy tool in lowering UE

However macro policies mainly address cyclical UE and effectiveness in lowering UE is limited by the NAIRU - supply constraint of labour. therefore LM reforms play important role in reducing NAIRU and long term UE rate

1) Flexibility and efficiency of the labour market -- decentralised system -- wage rises linked to productivity -- less pressure on wages -- cheaper to hire labour -- less UE
Also less union power and less stringent unfair dismissal laws makes labour more attractive resource. However this involves a trade-off in worker rights and is politically unpopular eg. Howard Workchoices

2) increasing efficiency of employment finding agencies eg. Job Network -- lower time lags associated with finding new work (frictional UE) and prevent substantial loss of skills which could make labour less employable

3) Increased funding in education and training -- build up skills of workforce -- more employable esp. in Aust. service based economy.
However as skills increase, wages increase -- labour may outprice itself or move to locations with lower marginal income tax rates -- brain drain

4) tax incentives -- eg. increasing the lower income Earner's tax offset -- increases motivation to work and participation rate -- leading to fall in UE in medium - long term

5) Mutual obligation schemes eg. work for the dole. allows welfare workers to retain job skills -- making them more employable in the medium term
However individuals may feel stigmatised in the workforce and hence become reliant on welfare payments

Wow. yep. that is way too long for a 5 marker S: what would you say is irrelevant?
[/B]

Okay, everything you said is relevant, it's just finding shorter ways to explain things or cutting down on multiple ideas. You could talk about any of these in your essays though. I'll just edit what you've said:

MACRO
Macroeconomic policies may be used to address cyclical u/e through stimulating AD.
MP: Expansionary stance -> lower interest rates -> encourages consumption and hence aggregate demand, thus increasing the derived demand for labour. However, MP is more effective at slowing the economy than stimulating it to encourage employment. FP, on the other hand, is more effective at stimulating the economy through an expansionary stance -> more G, less T through raising the tax-free threshold or lowering marginal etc. -> which would increase disposable incomes, consumption and hence the demand for labour.

(do not talk about the budget programs in reference to LT effects, as LT effects are micro-related -> if you want to talk about the budget etc. in fiscal policy, refer only to the short-term to medium-term effects of the programs)

However, as macroeconomic policies are demand-side focused, labour market reforms (which target AS) are needed to lower the long term ue rate and reduce the NAIRU

1) Decentralised system means wage rises are linked to productivity, which results in lower overall production costs and hence lower unemployment as firms can hire more workers. However, this method may be limited by political influences as it involves a trade-off in worker rights.

2) Increasing efficiency of employment finding agencies eg. Job Network -- lower time lags associated with finding new work (frictional UE) and prevent substantial loss of skills which could make labour less employable

^ this is enough. You could add in your skills/training thing if you could do it in 1-2 short sentences. A 5 marker would probably be one page, so yeah this seems about right.

 

[mattopirotta]

Describe the factors affecting Aust. TOT and the impact of an improvement in the TOT on the BOP. (4marks)

I'll have a shot at this.

There are a number of factors that could influence Australia's TOT. The value of the AUD, for example, plays a key role in determining the value of both imports and exports, both of which affect the TOT. An appreciation for example, would make make import prices drop whilst export prices would rise and vice versa. The global and domestic economic conditions can also influence the supply and demand of goods and services in a way that can influence export and import prices. Periods of strong economic growth domestically, for example are usually characterised by increased demand for imports which may lead to a detrioration of the TOT. Changes in the TOT caused by these or any other factor can also affect the volume of trade, hence leading to an improvement or deterioration in the BOP...(not quite sure how to link this)

Here's another question: Explain the role of two international organisations in promoting globalisation (sorry if this has been asked before I'm a late arrival)

 

[vexing_sv]

I'll have a shot at this.

There are a number of factors that could influence Australia's TOT. The value of the AUD, for example, plays a key role in determining the value of both imports and exports, both of which affect the TOT. An appreciation for example, would make make import prices drop whilst export prices would rise and vice versa. The global and domestic economic conditions can also influence the supply and demand of goods and services in a way that can influence export and import prices. Periods of strong economic growth domestically, for example are usually characterised by increased demand for imports which may lead to a detrioration of the TOT. Changes in the TOT caused by these or any other factor can also affect the volume of trade, hence leading to an improvement or deterioration in the BOP...(not quite sure how to link this)

Here's another question: Explain the role of two international organisations in promoting globalisation (sorry if this has been asked before I'm a late arrival)

With the impact of TOT on BOP, divide it into its components
So improvement in TOT means our X revenue can finance M expenditure --> improvement in BOGS
However high TOT attracts foreign investment into areas experiencing high X prices eg. currently China buying a substantial proportion of shares in mining companies ----> increasing our servicing costs and worsening the net primary incomes account on CAD

be careful with saying 'Periods of strong economic growth domestically, for example are usually characterised by increased demand for imports which may lead to a detrioration of the TOT'
TOT is concerned with prices, not volume. Our X prices can still be rising despite high demand for imports. I get what you're trying to say though. Maybe just word it differently

Explain the role of two international organisations in promoting globalisation
IMF
-- provides 'rescue packages' to countries experiencing financial crisis' eg. Greece. However loans are conditional and require countries to implement Washington Consensus policies eg. deregulating industries, shifting budget to surplus -- accelerate international convergence and promote globalisation

G20
co-ordinates global macroeconomic policies -- countries adopting similar macro stances and experiencing similar fluctuations in their biz cycle -- increased synchronisation of global economic activity

don't know what else to say.. never been good at organisation questions S:

And thankyou Aphorae

I have problems trying to think of what to say for all the productivity questions
eg. Explain how increased productivity achieves EG. (4 marks) <-- past paper questions
I don't know if I really don't know the linkages involved or.. they expect us to waffle on about efficiency and competition for the whole 4 marks?
Would be great if someone could clarify this. thankyou !

 

[garygeng]

I have problems trying to think of what to say for all the productivity questions
eg. Explain how increased productivity achieves EG. (4 marks) <-- past paper questions
I don't know if I really don't know the linkages involved or.. they expect us to waffle on about efficiency and competition for the whole 4 marks?
Would be great if someone could clarify this. thankyou !

I think I'll have a go at this, but don't shout at me if I'm wrong...

When you talk about productivity, I'm guessing you'll relate it to AS and how AS will influence EG.

So when you get more productive, you are able to produce more goods with relatively less cost of production. This allows you to experience EG without the worry of inflation as opposed to increasing AD.

I'm guessing to get the 4 marks, they'll like you to draw out a AD/AS curve as well, to show you got a good knowledge of what's it about and link it to your answer

Sorry if I'm wrong or missing something...

 

[Aindan]

I think I'll have a go at this, but don't shout at me if I'm wrong...

When you talk about productivity, I'm guessing you'll relate it to AS and how AS will influence EG.

So when you get more productive, you are able to produce more goods with relatively less cost of production. This allows you to experience EG without the worry of inflation as opposed to increasing AD.

I'm guessing to get the 4 marks, they'll like you to draw out a AD/AS curve as well, to show you got a good knowledge of what's it about and link it to your answer

Sorry if I'm wrong or missing something...

Also, I think they would want definitions of Productivity and Economic growth.

 

[garygeng]

Also, I think they would want definitions of Productivity and Economic growth.

Yeah definititely, I think that'll get you a mark, then I guess 2 marks on explaining and a mark on the AD/AS curve? Possibly...

 

[aphorae]

I think I'll have a go at this, but don't shout at me if I'm wrong...

When you talk about productivity, I'm guessing you'll relate it to AS and how AS will influence EG.

So when you get more productive, you are able to produce more goods with relatively less cost of production. This allows you to experience EG without the worry of inflation as opposed to increasing AD.

I'm guessing to get the 4 marks, they'll like you to draw out a AD/AS curve as well, to show you got a good knowledge of what's it about and link it to your answer

Sorry if I'm wrong or missing something...

You don't need a graph or whatever for short answers. You can use it to help you explain what you're talking about (e.g. if you wanted to talk about 'through a shift...' etc.) but I don't think you'd get a mark on a graph alone

You could say that through lowered costs there would be more demand (as goods are comparatively cheaper than they would be through reduced cost-push inflation, or because firms can afford to cut prices as they are producing lower cost goods)

You could say as firms become more productive, they also become more internationally competitive = higher D for goods/higher exports = increased AD/EG

You could also stretch it if it was 5-6 marks and say something like increased productivity would increase attract investment/increase investor confidence => increased AD/EG

But yeah, like Aindan said you would need definitions for 1 mark.

 

[vexing_sv]

ahh icic starting to see how to make connections there

What about this 5 marker? Explain how deregulation has led to productivity growth

do we just say increased competition, more incentive to adopt new production processes and increase productivity to stay in business and then wield a couple of examples eg. labour market and agricultural deregulation?

I'm not too sure how to integrate financial deregulation when it comes to productivity :\

Also I know a lot of people are saying there'll be micro/macro extended question. Do they usually only ask policy questions together in ONE section only and globalisation/ issues in the other? or does it really depend on the exam maker's fancy? eg. is it possible to have mirco in one section and macro in the other?