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HSC 2015 Economics Marathon (4 Viewers)

Ekman

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Re: 2015 HSC Economics Marathon

What is the equilibrium level of national income if S=-40 + 0.2Y and I =200 ?
At equilibrium:

S=I
Therefore 200 = -40 + 0.2Y
240=0.2Y
Y=1200
 

RecklessRick

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Re: 2015 HSC Economics Marathon

Out of curiosity, regarding questions like:

Assume that C = 100 + 0.7Y and I = 200, what is the equilibrium level of national income?

Have these ever actually come up on the HSC? Particularly under the current syllabus, not like 15 years ago
 

Ekman

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Re: 2015 HSC Economics Marathon

Out of curiosity, regarding questions like:

Assume that C = 100 + 0.7Y and I = 200, what is the equilibrium level of national income?

Have these ever actually come up on the HSC? Particularly under the current syllabus, not like 15 years ago
I think it may come up if it didn't already under the current syllabus, because it utilises the knowledge of the circular flow of income model (Where Y=C+I, you can derive that from Y=AD at equilibrium and ceterus paribus to remove the exports and government expenditure.)
 

RecklessRick

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Re: 2015 HSC Economics Marathon

I think it may come up if it didn't already under the current syllabus, because it utilises the knowledge of the circular flow of income model (Where Y=C+I, you can derive that from Y=AD at equilibrium and ceterus paribus to remove the exports and government expenditure.)
My point is that it's not necessarily actually in the course. Riley covers it (Dixon doesn't) and schools like Barker put it in their trials, but I have a feeling that's a hangover from a previous syllabus. If you look at the hsc economics syllabus, whereas other calculations like S+T+M=I+G+X are explicitly referenced, there's no hint of this.
 

Ekman

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Re: 2015 HSC Economics Marathon

My point is that it's not necessarily actually in the course. Riley covers it (Dixon doesn't) and schools like Barker put it in their trials, but I have a feeling that's a hangover from a previous syllabus. If you look at the hsc economics syllabus, whereas other calculations like S+T+M=I+G+X are explicitly referenced, there's no hint of this.
Well there is no harm in knowing it, and its better to be safe than sorry.
 

RecklessRick

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Re: 2015 HSC Economics Marathon

Well there is no harm in knowing it, and its better to be safe than sorry.
Seems weird that schools would test on it still if it hasn't been on an HSC exam nor even makes an appearance on the syllabus
 

rrulez

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Re: 2015 HSC Economics Marathon

Formula to calculate real gdp?
 

Gabriel Moussa

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Re: 2015 HSC Economics Marathon

Is it correct to make the assumption that if the RBA uses monetary policy to increase the cash rate, thus leading to a rise in interest rates through the transmission effect, that the levels of investments into Australia would increase due to the rate of higher returns, and because of this economic growth will rise - as I component of AD= C+I+G+(X-M) would increase.
Higher interest rates will have a larger effect on spending... (it'll decrease due to the higher opportunity cost) and domestic investment will also cease because of the higher cost of getting a loan. So what you're talking about will like amount to jack ?
 

Ekman

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Re: 2015 HSC Economics Marathon

Higher interest rates will have a larger effect on spending... (it'll decrease due to the higher opportunity cost) and domestic investment will also cease because of the higher cost of getting a loan. So what you're talking about will like amount to jack ?
Well not really, if the question asked about exchange rates, you would need to talk about that, but it will be meaningless in the context of stimulating economic growth.
 

Gabriel Moussa

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Re: 2015 HSC Economics Marathon

Well not really, if the question asked about exchange rates, you would need to talk about that, but it will be meaningless in the context of stimulating economic growth.
What was the question it wasn't clear?
 

Ekman

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Re: 2015 HSC Economics Marathon

What was the question it wasn't clear?
Well she was just clarifying about the impacts a change in the cash rate will have in terms of foreign investment.
 

ta26

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Re: 2015 HSC Economics Marathon

Explain how an increase in the retirement age might affect labour force participation and unemployment. 3marks
 

Gabriel Moussa

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Re: 2015 HSC Economics Marathon

Evaluate the Effectiveness of the current policy in reducing unemployment in the Australian economy 6 marks
 

spatula232

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Re: 2015 HSC Economics Marathon

- Expansionary monetary policy -- as of May 2015, historically low interest rates of 2%.
AD = C+I+G+(X-M) --> expansionary monetary policy aims to increase consumption and investment through the ability to borrower at a lower rate of interest, increasing AD and stimulating growth. In doing so, this should increase employment opportunities since labour is a derived demand from the demand of goods and services.
- Mildly contractionary fiscal policy: With the aim of returning the budget to surplus, the fiscal outcome is said to be mildly contractionary, reducing govt. expenditure (G of AD equation). If this is reduced, this would result in a decrease in AD, reducing overall growth rates and reducing the number of employment opportunities. One such example from the 2015 Budget is the Writing off of the Cth $1.5B contribution to the East-West Link in Melbourne. However, other policies attempt to reduce the UE rate, such as the 2015 $330m Youth UE Strategy as an example of a labour market policy targeting structural UE; attempting to provide unemployed youth with the skills necessary to find employment. This would be an example of micro-reform as it is addressing the structural issues of the economy; promoting a re-skilling of the labour force.

It is clear that the stances of macro policy, both fiscal and monetary, oppose each other (monetary being expansionary and fiscal being contractionary). In this way, the effect on UE in the Australian economy hasn't been extremely effective. It can be seen currently that UE has been rising --> During GFC -- UE = 5.8%, currently as of August, UE = 6.2%. Thus it is clear that due to the lack of consistency of macro policies, the aim of lowering UE has been quite ineffective.
 

spatula232

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Re: 2015 HSC Economics Marathon

Discuss the rationale behind microeconomic policy. 4 Marks
 
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Re: 2015 HSC Economics Marathon

Explain how an increase in the retirement age might affect labour force participation and unemployment. 3marks
An increase in the retirement age increases the labour force (unemployed + employed) - and thus increases the labour force participation rate. However, it can also lead to an increase in unemployment as once individuals are retrenched from this age bracket, it is harder for them to find jobs as they will lack skills in other sectors - these individuals will be left structurally unemployed.
 
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Re: 2015 HSC Economics Marathon

Discuss the rationale behind microeconomic policy. 4 Marks
Microeconomics (supply-side policies) is action taken by the government to improve resource allocation between firms and industries in order to maximise output from scarce resources central to achieving sustainable growth and thus decrease the cost of production which will decrease inflation in the long term. Microeconomics is designed to improve efficiency, productivity and international competitiveness. They promote structural change in the economy by making product and factor markets work more efficiently, through increased market competition. However, in the short run, microeconomics brings forward some costs: increased structural unemployment as the less efficient competitive industries reduce production; microeconomic reform involves the reduction in the subsidies given to businesses; microeconomics also reduces laws that protect the rights of labourers. These short term costs however have benefits in the long run; efficient industries will be able to produce more products at lower prices, increasing consumption and export purchasing and thus economic growth; and unemployment will decrease as increase in exports increases the demand for labour. Examples of microeconomic reforms include, tariff reforms, deregulation on individual industries, and labour market reform.
 
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Re: 2015 HSC Economics Marathon

Analyse the role of microeconomic reform policies in promoting long term economic growth in Australia? 4
 
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Re: 2015 HSC Economics Marathon

Explain the potential impact on the Budget outcome of reducing marginal income tax rates. 3
 

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