ummmmm no if they want our exports that increases demand for the $A which appreciates it, increased demand for our imports would move the demand curve to the right whereas the picture shows the supply curve moving the right meaning the supply of the $A has increased
The answer is A, because if Australians demand foreign assets, they have to sell the $A to purchase the foreign currency with which to buy the assets, thus increasing supply of $A.
the formula for real GDP is in fact:For all of you that are wondering what question 12 was:
According to the data, which statement is correct for this economy?
a) Real GDP has increased and the quality of life has improved
b) Real GDP has increased and the quality of life has declined
c) Real GDP has decreased and the quality of life has improved
d) Real GDP has decreased and the quality of lie has declined
This is how i worked it out, and what i believe to be right.
The Real GDP Formula is:
CPI previous year
--------------------- x GDP
CPI current year
----- x 6000 = 5200
This means that REAL GDP has decreased from 6000 to 5200, therefore the answer is C
Anyone disagree with this? Im interested to know because since people are saying its A it will haunt me.
using 130 as the base year,the base year for this is 130. year 1 is 130. there is no 100!!!! if year 1 was 100 then yes, but the base year isnt. usualy year 1 is 100. thats wat has tricked you. so how is real GDP going to decline, especialy when hdi has risen so significantly . 100 is not the base. go ask your economics teacher please i am sik of explaining.
using 130 as the base year,
real GDP for year 1 = 6000/130 x 130 = 6000
real GDP for year 2 = 6800/150 x 130 = 5893
which is still a decline in real GDP. and hence its C.
ps I'm studying Economics at uni. if you use the calculations you've used to get answer A, you're essentially no longer comparing prices to your base year - base year stays the same.
haha i'm an economics tutor, and i've got alot of students from BoS. which is why i'm still here on occasion =)munchiecrunchie why are you on a forum for HSC students if you are at uni, no offense I just had to ask, ps law/eco seems like a cool degree, anyway buddy as I mentioned earlier it isn't logical that real GDP would fall and living standards would go up as it suggests inflation is too high and that the economy is producing less goods and services reducing real incomes and hence the revenue need for the government investement infastructure, education etc, so must be a and not c