Economics Marathon (1 Viewer)

[zedzed]

Re: Economics Marathon - The 2006 Version

Q: I still don't get this but how does fiscal policy reduce CAD?

it doesn't really. but some govt spending through the budget can help.
eg. allocating funds to improve roads and shipping facilities helps export companies to get their goods out faster. this is particulary significant these days as our economy is operating at full capacity and overseas demand for our commodities currently exceed what we actually export. so that extra funding will help exporters export more, reducing the BOGS deficit and thus the CAD.

another eg. in the recent budget the govt set up a National Savings Fund to place all the money from budget surpluses. this helps to increase national saving so that we hopefully borrow less from overseas. that will have the effect of reducing the KAFAS and thus reducing debt servicing costs and also the net Y deficit.

im so shit at explaining stuff.


next Q - explain two impacts that globalisation has had on world economic development

 

[gemrism]

Re: Economics Marathon - The 2006 Version

Evaluate the role and implementaion of monetary policy as a tool of economic management??? 0_o!
tghis question gets me LOST!

 

[destroyer5787]

Re: Economics Marathon - The 2006 Version

it doesn't really. but some govt spending through the budget can help.
eg. allocating funds to improve roads and shipping facilities helps export companies to get their goods out faster. this is particulary significant these days as our economy is operating at full capacity and overseas demand for our commodities currently exceed what we actually export. so that extra funding will help exporters export more, reducing the BOGS deficit and thus the CAD.

another eg. in the recent budget the govt set up a National Savings Fund to place all the money from budget surpluses. this helps to increase national saving so that we hopefully borrow less from overseas. that will have the effect of reducing the KAFAS and thus reducing debt servicing costs and also the net Y deficit.

im so shit at explaining stuff.


next Q - explain two impacts that globalisation has had on world economic development

What is KAFAS???????????

 

[Sparcod]

Re: Economics Marathon - The 2006 Version

Capital and financial account surplus.

 

[zedzed]

Re: Economics Marathon - The 2006 Version

KAFAS = capital and financial account surplus

Evaluate the role and implementaion of monetary policy as a tool of economic management??? 0_o!
tghis question gets me LOST!

wow that's a huge question. there's no way anyone can answer it properly in a few paragraphs.

but if it were an essay this is how you'd structure it
1. intro
2. background paragraphs on monetary policy
3. aust govt's economic objectives (sustained growth, price stability, low u/e)
4. how monetary policy affects each of these objectives
5. possible conflicts (eg. trade off between u/e and inflation)
6. conclusion


my question from before - explain two impacts that globalisation has had on world economic development

 

[destroyer5787]

Re: Economics Marathon - The 2006 Version

i dont know the answer that i will assume though globalistion has lead to reduced production costs for many AUS businesses due to ability to outsource non-core operations thus reducing cost inflationary pressures of produciton however this may also reduce external stablity as the income deficit is widened through wages paid overseas....just a guesss.

My question. ARE loans over seas in the "other investment" part of the financial account classified as debits or credits when australia borrows from overseas?

 

[snowbunny]

Re: Economics Marathon - The 2006 Version

Debit

What is an externality and what can the gov't do to reduce them?

 

[destroyer5787]

Re: Economics Marathon - The 2006 Version

Debit

What is an externality and what can the gov't do to reduce them?

I think you are wrong, i checked that up and i am pretty sure that it is a credit. The current and financial accounts must increase in surplus for the current account deficit to increase, thus there needs to be an excess of credits over debits in the KAFAS for the interest repayments on the cad to increase....

 

[Sparcod]

Re: Economics Marathon - The 2006 Version

What is an externality and what can the gov't do to reduce them?

Externality is a social cost that disadvantages the population when a firm produces a good or service.

Government implements laws and restrictions, imposes fines and taxes, governing bodies .etc.

 

[joeyjojoshabado]

Re: Economics Marathon - The 2006 Version

Externality is a social cost that disadvantages the population when a firm produces a good or service.

Government implements laws and restrictions, imposes fines and taxes, governing bodies .etc.

u forgot to ask the next question!!! haha thats ok all is forgiven..

next question: what are some factors that contribute to income inequalities?

 

[Sparcod]

Re: Economics Marathon - The 2006 Version

What increases income inequality......

-rising unemployment (more people on welfare whilst is bull-crap income whilst the employed earn way more money)
-economic growth (rising incomes whilst the unemployed are distanced away)
-govt policies (tax cuts for rich like in this year's budget, reduction in public service spending, tax reform)

Contributing factors include:
-discrimination
-education levels
-inheritance/luck


Question: how can the government reduce this problem of income inequality?

 

[P_Dilemma]

Re: Economics Marathon - The 2006 Version

Question: how can the government reduce this problem of income inequality?

Increased taxation and increased transfer payments are pertty much the only way to reduce "inequality". Most other policies may improve conditions of the lower classes, but will do so even more for the higher classes, creating even greater inequality.

Q: What policies bring about an increase in standard of living all-round?

-P_D

 

[zedzed]

Re: Economics Marathon - The 2006 Version

Q: What policies bring about an increase in standard of living all-round?

-P_D

fiscal policy - welfare payments, progressive taxation system, govt expenditure on such things like healthcare, education, etc

micro policies - encouraging an increase in aggregate supply which will increase employment in the long run and also economic growth.

weird question.


next - what are the limitations of macroeconomic policy in targeting external stability?

 

[Sparcod]

Re: Economics Marathon - The 2006 Version

External stability targeting usually is at the expense of economic growth and unemployment in the short-term. This was most apparent whereby the economy was slowed in the 1980s to reduce CAD through budget surpluses. Budget surpluses however increase savings.

The same can be said with Monetary policy where a rising CAD can prompt the RBA to raise interest rates to slow the economy down and reduce import demand.

 

[Sparcod]

Re: Economics Marathon - The 2006 Version

Describe factors which've influenced variations in economic development across countries.

 

[Valeu]

Re: Economics Marathon - The 2006 Version

Variations in economic development across countries can be caused by:

- differences in natural resource availability: Countries with greater access to natural resources such as oil, minerals, etc (eg, Australia) are at an advantage in terms of Economic Development compared to nations lacking in natural resources and access to them. Unless of course your country is an economic colony, in which case the profit from the natural resources will be repatriated to another country - see Latin America.
- poor governance/corruption: Poor Governance/Corruption will cause Government resources to be diverted away from economic development (spending on services and infrastructure) and into private hands.
- protectionist trade policies of first-world nations: Domestic producer subsidies by first-world nations can lock third-world countries out of large first-world agricultural markets. This has an acknowledged effect on increasing poverty, 'stunting economic development in the proccess. - J.Sachs - "If the third-world increased it's share of world trade by 1%, 128mil would be liofted out of poverty."
- lack of skilled labour within the country: unskilled labour reduces the nations attractiveness to foreign direct investment inflows, meh.

Outline the advantages and disadvantages of greater labour market de-centralisation.

 

[zedzed]

Re: Economics Marathon - The 2006 Version

Value, that was a great answer!

Outline the advantages and disadvantages of greater labour market de-centralisation.

im briefly outline the effects on each of the issues:

growth: decentralisation -> wages linked with the performance of individual workers -> increased productivity -> higher growth

unemployment: wages and employment will be more dependent on the cyclical movements of the economy because there is less govt intervention. this means that in when the economy is in a recession the bargaining power shifts in favour of employers which may increase unemployment. in good economic times the opposite may happen.

inflation: keeping wage pressures under control -> lowers inflation

distribution of Y: workers with high skills have a lot of bargaining power, low skilled workers do not -> greater inequality

environment: uh.. no clear link.

next q - outline the role of the IMF in the global economy.

 

[onebytwo]

Re: Economics Marathon - The 2006 Version

next q - outline the role of the IMF in the global economy.

the IMF was established to promote financial stability throught encouraging exchange rate stability, removing FX controls to maintain economic growth. IMF has assited countries experiencing short term BOP problems. set up SDR's which allowed economies to obtain FX by drawing their own currency from other countries based on economic size and currency stability

next question: - outline how the federal government can use a fiscal surplus

 

[Mr. Sabuncuoglu]

Re: Economics Marathon - The 2006 Version

Outline the impact of booming commodity prices on the Australian Economy

 

[Sparcod]

Re: Economics Marathon - The 2006 Version

next question: - outline how the federal government can use a fiscal surplus

Let's see..surpluses can be used for:
-reducing debt
-providing tax cuts
-accumulating and raise national savings.

Outline the impact of booming commodity prices on the Australian Economy