Economics game (3 Viewers)

[tku336]

It's called the J-Curve effect. A depreciation would lead to a short term deterioration of our trade balance as exporters get less revenue, import spending rises for given quantity ect (valuation effect); but then it would result in a long term improvement in the trade balance as exports become more competitive ect (volume effect)

 

[Scrub Ya Flaps]

1) Strong economic growth
2) Full employment
3) Price stability/ low inflation
4)External stability
5) Income equality
6) Environmental management.

These can be grouped into 3 main groups:
- Economic Growth
- Internal stability
- External Stability



Identify the main sources of wealth in the Australian economy.

Thanks for answering and helping me to haha.

ANSWER = not sure but...
Would i be in correct in saying that houses, cars and durable consumer goods etc, is wealth?
I'm also thinking that you could have wealth stored as shares and bonds, but i'm not sure if this counts as wealth, but the thing is, its not liquid so its not cash.

EDIT: looked in my book and it said the exact same thing for my first part and my second part it had the same BUT it added "bank deposits and cash"
AND "wealth is the amount of a person's net assets at any one point in time"

Briefly describe the implications of the multiplier on fluctuations in the level of economic activity in an economy.. i get my questions form the 'economic issues' thing in the syllabus but i change em a bit.. just so you know

 

[AnandDNA]

It's called the J-Curve effect. A depreciation would lead to a short term deterioration of our trade balance as exporters get less revenue, import spending rises for given quantity ect (valuation effect); but then it would result in a long term improvement in the trade balance as exports become more competitive ect (volume effect)

But doesnt the increase in foreign flows eventually cause a higher net income deficit and thus a worsening CAD

 

[Zak Ambrose]

i would add to the post about. to me the key word in the question is "expectations"... the RBA influence inflationary expectations by setting a goal of a yearly average of 2-3%, over the course of the business cycle. and their success in achieving and maintaining this aim influences inflationary expectations.

Briefly describe the alternative ways of financing a budget deficit and it's impact on the Australian economy
1. borrow money from RBA. result > inflation
2. borrow from domestic private sector. result > may cause crowding out effect, depends on the current level of investment, i.e. not likely to happen in a recession.
3. borrow from overseas. result > CAD problems may arise. cost of financing debt. volatilility to foreign confidence.

Outline how a government can use fiscal policy to alter the level of Y distribution

 

[AnandDNA]

Briefly describe the implications of the multiplier on fluctuations in the level of economic activity in an economy.. i get my questions form the 'economic issues' thing in the syllabus but i change em a bit.. just so you know

The multiplier refers to the concept where an increase or decrease in injections will eventually lead to an even higher change in national income. Thus for example a small injection by the government will stimulate economic activity in some areas causing a rise in AD in other areas too. This eventually boosts economic activity across different industries and promotes economic growth

What are the reasons for an the implications of Australia persistent CAD

(you can write in dot pts)

 

[tian1chen]

yea a increase in the AUD can worsen the CAD due to the fact that investments in Australian increase relatively. Therefore there will be less capital inflow and more capital outflow (cheaper to buy imports). Simplified i can buy cheaper stuff oversea in AUD since it has risen in value, but other people from overseas don't want to buy my stuff because it is too expensive (usally short term and medium). However in the long term i think and this is only i think it would increase competitiveness.

A decrease in interest rate will improve the CAD in the short term, because a decrease in the financial account surplus (KAFA).

 

[Scrub Ya Flaps]

What are Australia's economic objectives?

-Sustainable level of economic growth
-Full employment
-Inflation between 2-3%
-external stability
-an apporpriate inequality in distribution of income and wealth <<<<< nt sure help me out

-Ecologically sustainable development

By using examples, explain the impacts of tax reforms in achieving Australia's economic objectives ??[/quote]

>>>>>>not an answer to your Q but i looked in my text book and it stated "Equitable Distribution of Income" so your on the right track. good work

I thought Inflationary expectations would rise as people have more money in their hands (demand-pulled inflation)

I'm sorry but i get confused with monetary policy. I'm going to look up a flow chart or something help me.. i can never get it right

When monetary policy is "loosened" that means that the cash rate is lowered right? which means that it is expansionary... see this is what confuses me. When consumers have more money since the cash rate has dropped they would be more likely to spend it. BUT if they new economics, saw the news (HAHAHAHA) and new that when the RBA used expansionary policy (e.g. recently until yesterday) the business cycle is in a downswing which would actually change their view and save thier moeny as bad times are predicted...

i hope someone can decypher this, lol it doesnt sit well with me hey, there msut be a logcial explantion, after all its economics. help me before i

 

[AnandDNA]

Name the three main global organisation to do with economics and their roles within the global community?

1. The WTO is a body that is promoting global reductions in trade and a move towards free trade.

2. The IMF provides emergency funds to nations undergoing exchange rate collapses or other economic issues

3. The world bank provides loans to developing countries to finance devlopment projects which will benefit the economic growth and development of the country in the future

 

[AnandDNA]

"Equitable Distribution of Income"[/B] so your on the right track. good work

What is an 'equitable distribution of income' cause Australia certainly doesnt aim for a gini coeffcieint of 0 as that takes out the incentive effect for working harder and more productive

HELP PLEASE

 

[tian1chen]

hmmm see the herd mind set working if i have more money and i spend it and buy let say a new jag and i show other people other people. "Ordinary people"(majority of people) would goes mhhhh i want to buy something new and they go and buy something and then more people buy and so on and so forth. So of like a new catch phrase catches on it starts from one person to another, however there are those who would think it pointless and never bother with the catch phrase (economist).

 

[tian1chen]

what the heck is y distribution

Outline how a government can use fiscal policy to alter the level of Y distribution

 

[Zak Ambrose]

Outline how a government can use fiscal policy to alter the level of Y distribution
through a progressive taxation system the government redistribute Y from high Y earners to low Y earners, through welfare payments.



Explain how fiscal policy could be used by a government to reduce a deficit on the current account

 

[AnandDNA]

what the heck is y distribution

Outline how a government can use fiscal policy to alter the level of Y distribution

Im guessing income distribution

So they could tax the high income earners more and redistribute this money to the poor through higher welfare payments

 

[Nikkay75]

1) Strong economic growth
2) Full employment
3) Price stability/ low inflation
4)External stability
5) Income equality
6) Environmental management.

These can be grouped into 3 main groups:
- Economic Growth
- Internal stability
- External Stability

It is certainly easiest to place them into the 3 groups.

External Stability
- Exchange Rates
- Balance of Payments
- Terms of Trade

Internal Stability
- Full Employment
- Low Inflation - Price Stability

Economic Growth[FONT=&quot][/FONT][FONT=&quot][/FONT]

 

[Zak Ambrose]

Explain how fiscal policy could be used by a government to reduce a deficit on the current account

 

[AnandDNA]

Outline how a government can use fiscal policy to alter the level of Y distribution
through a progressive taxation system the government redistribute Y from high Y earners to low Y earners, through welfare payments.



Explain how fiscal policy could be used by a government to reduce a deficit on the current account

The government may have a budget surplus by reducing government spending and increasing taxation. That will decrease AD and hence consumers will pruchase less. This means a decrease in the purchases of imports and hence the BGS improves along with the CAD

Using examples, explain the impact of tax reform in the australian economy over the past decade

 

[Scrub Ya Flaps]

What is an 'equitable distribution of income' cause Australia certainly doesnt aim for a gini coeffcieint of 0 as that takes out the incentive effect for working harder and more productive

HELP PLEASE

Ok, im reading the section on it and ill try and condense since i'm not to sure either haha so i'm actually glad u asked.

It does state that there is no perfect equality in the Distribution of Income in market economies like Australia (obviously). It goes on to talk of how the gov't has a resposibilty to redistubute income from the rich to the poor in order to alleviate absolute and relative poverty.

BUT... it stated 'the objective is not to create a perfectly equal distribution of income, but to reduce the extent of inequality"

BY; provding transfer payments to disadvataged social groups
making the taxation system progressive
using a proportion of tax revenure to finance spending on elemtns of the social wage such as public education, health, house and community services
Reduceing the incidence of poverty traps through the selective targeting of welfare assisstance, and by providing tax relief thought the tax-transfer system for low income H/H

HOPEFULLY THIS IS ENOUGH, IF NOT WRITE BACK ITS ALL GOOD

NOT SURE IT NEEDED THIS MUCH WRITTEN ABOUT IT SINCE THIS IS PRETTY MUCH ALL THE STUDY IM DOING (IN THE GAME).. WHY NOT

 

[tian1chen]

• Spending of infrastructure and education increases competitiveness, making the CAD lower as supply is greater therefore more exports (long term).
• Spending on increase exports through government incentives and groups can't remember what they are called plz help on the name of these groups.
• Maintaining a fiscal balance, therefore not increasing the crowding out effect.

 

[AnandDNA]

Ok, im reading the section on it and ill try and condense since i'm not to sure either haha so i'm actually glad u asked.

It does state that there is no perfect equality in the Distribution of Income in market economies like Australia (obviously). It goes on to talk of how the gov't has a resposibilty to redistubute income from the rich to the poor in order to alleviate absolute and relative poverty.

BUT... it stated 'the objective is not to create a perfectly equal distribution of income, but to reduce the extent of inequality"

BY; provding transfer payments to disadvataged social groups
making the taxation system progressive
using a proportion of tax revenure to finance spending on elemtns of the social wage such as public education, health, house and community services
Reduceing the incidence of poverty traps through the selective targeting of welfare assisstance, and by providing tax relief thought the tax-transfer system for low income H/H

HOPEFULLY THIS IS ENOUGH, IF NOT WRITE BACK ITS ALL GOOD

NOT SURE IT NEEDED THIS MUCH WRITTEN ABOUT IT SINCE THIS IS PRETTY MUCH ALL THE STUDY IM DOING (IN THE GAME).. WHY NOT

Lol thanks for that. i get all of that but i dont get at what point can we say tht our objective of distribution of income and wealth is achieved

is it at gini coefficient at 0.3 at 0.2 at -0.2

 

[tian1chen]

outline recent initiative to achieve global free trade?