Section I: Multiple Choice (2 Viewers)

[seano77]

Re: Multiple choice answers

Your logic is wrong. First of all, even though a) is wrong, a reduction in tariffs will clearly change the price (albeit downwards).

Subsidies also change price.

Answer = d)

But it has to be in increase in price? Subsidies (D) enables domestic businesses to compete AT the world price (greater supply, lower price). It does nothing whatsoever to the world price, which, to get the right answer, needs to move upwards. Prom P1 to P2. Only a quota can do this out of the four options.

 

[Zouzor]

For 7 i got C. macroeconomics can be used to bring employment below the natural unemployment rate at the cost of increased inflation. so intitially unemployment will decrease and inflation will rise. then evenutally unemployment will trend back towards the natural rate as businesses lay of people due to inflation. (long run phillips curve)

 

[lolcal]

Re: Multiple choice answers

Your logic is wrong. First of all, even though a) is wrong, a reduction in tariffs will clearly change the price (albeit downwards).

Subsidies also change price.

Answer = d)

yeah no, subsidies don't raise the world price. accept that you're wrong lol.

 

[vmoore]

Some pretty dodge multiple choice questions i thought. Most were easy but there were some really weird ones.

question 7 on the impact of an increase in aggregate demand when the economy is at the natural rate - I would say they we're all wrong, when employment is at the natural rate it means cyclical employment is zero and changes in aggregate demand only effect cyclical employment - hence no change in employment.

question 12, again they all had some elements of incorrectness. While i think the answer they wanted was D if you borrow from the private sector it forces domestic firms to borrow from overseas, worsening external stability.

Q 20 also pretty hard.

yeah but increased aggregate demand can lead to rise of other sectors or industries and hence an decrease in structual as well.
the answer to 7 is C

 

[runnable]

For 7, unemployment will increase because hidden unemployment will decrease due to better economic conditions, hence increasing unemployment in the short run.

 

[lolcal]

For 7 i got C. macroeconomics can be used to bring employment below the natural unemployment rate at the cost of increased inflation. so intitially unemployment will decrease and inflation will rise. then evenutally unemployment will trend back towards the natural rate as businesses lay of people due to inflation. (long run phillips curve)

that would be right if the question didn't say for an economy which is already at its nairu, it's A.

 

[seano77]

What kind of marks would i be looking at with these answers?

1. A
2. B
3. D
4. B
5. A
6. D
7. C
8. C
9. C
10. A
11. C
12. D
13. C
14. A
15. C
16. A
17. D
18. D
19. C
20. A

From what lolcal and I agreed on at the start of the thread, you would've got 14. 1D, 7A, 11A, 16D, 17A, 18B.

 

[maximilien101]

umm for 7 its 7c how can u/e decrease when there is an increase in agg dmnd/ and also im petty sure 17 is a as gst are an indirect tax thus tax lower income proportionally more than higher income earners

 

[AWrules]

This is what i got...

1)D
2)B
3)D
4)B
5)A
6)D
7)C
8)C
9)C
10)A
11)A
12)B
13)C
14)A
15)C
16)D
17)A
18)B
19)C
20)B

My friend got D, could well be right

I thought D might be wrong, as it contributes to the 'crowding out' effect and thus increases dependence on foriegn funds, adding to financial liabilities, worsening the CAD which is a measure of external stability

 

[Zouzor]

For 12 i got B. both B and D are ways to fund a surplus. but D will create a crowding out effect making people go overseas to borrow, hence increasing foeign debt, a key component of external stability.

 

[runnable]

For those who didnt see this:

For 7, unemployment will increase because hidden unemployment will decrease due to better economic conditions, hence increasing unemployment in the short run.

 

[runnable]

For 12 i got B. both B and D are ways to fund a surplus. but D will create a crowding out effect making people go overseas to borrow, hence increasing foeign debt, a key component of external stability.

Sry crowding out effect just increases cost of borrowing so some people will not be able to borrow. It can prompt ppl to borrow from overseas buts its nothing like borrowing directly from overseas to finance a deficit.

 

[Zouzor]

Even if any economy is at its nairu it can still go below that its just inflationary. For example a business can employ a phycopath however he will not be productive but he will still get a wage leading to inflation. the natural rate of unemployment in made up of structual unemployed and what not. You can still employ those people its just not productive.

 

[jasonml]

Re: Multiple choice answers

But it has to be in increase in price? Subsidies (D) enables domestic businesses to compete AT the world price (greater supply, lower price). It does nothing whatsoever to the world price, which, to get the right answer, needs to move upwards. Prom P1 to P2. Only a quota can do this out of the four options.

Lol just checked textbook. Alright i lose. fuck you guys

 

[Zouzor]

Sry crowding out effect just increases cost of borrowing so some people will not be able to borrow. It can prompt ppl to borrow from overseas buts its nothing like borrowing directly from overseas to finance a deficit.

Selling bonds to overseas? isent that equity financing not debt?

 

[christiina.h]

i believe 17 is a) not b) as an increase in the top marginal tax rate would promote equality as its not saying to move the top threshold just increase the rate at which they are taxed however an increase in GST would take a higher percentage of lower income earners incomes therefore increasing inequality

17 is (a) because the GST is regressive, as in, it taxes the same percentage no matter what income you earn, therefore is a disadvantage to lower income earners who have to pay more of their income than higher income earners thus increasing inequality

 

[runnable]

Selling bonds to overseas? isent that equity financing not debt?

The question was asking about external stability, hence debt/equity same difference.

 

[Zouzor]

Yeah i got 17.A aswell

 

[AWrules]

This is what i got...

1)D
2)B
3)D
4)B
5)A
6)D
7)C
8)C
9)C
10)A
11)A
12)B
13)C
14)A
15)C
16)D
17)A
18)B
19)C
20)B

CAN SOMEONE PLEASE MARK MINE im hoping for 20/20,

anybody differ in opinion on any>?

 

[Zouzor]

Meh you might be right. i just saw it as external stablity is made up of CAD, exchange rate, terms of trade, and net foreign debt. if you wernt borrowing i thought it would be ok