Economics Marathon 2014 anyone??? (3 Viewers)

[avi888]

Im not sure if im right but:

I think its good to link it to the external stability when ya talking abt high inflation forced the govnt to tighten MP by increasing IR -> attract foreign investors to invest in Aus -> increase financial inflows in the form of foreign equity -> adds to CAD on the BoP due to returns on foreign investments in form of dividends , which recorded as debits on the net primary part of the CA -> worsening CAD & external stability

I think you kinda repeat urself in the second part as I think you can just link that bit "decrease in AD results in decrease EG results in decrease quality of life and living standard" to the first bit of your answer
And linking increase IR to a broader aspect - the global economy CAD stuff like that



Feel free to correct me if im wrong

Great answer BTW !!!!


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ahhh, i thought about including it, but was like hmmmm.... seemed a bit indirect at the time, so i didnt include it but yeah probably a good idea

Thanks for the feedback )

 

[Colemans]

Analyse the benefits of a sustained period of low inflation on Australia’s economic performance (5 marks)

A sustained period of low inflation indicates that Australia's economy is within the targeted bands of 2-3%. This can further indicate that Australia is in a period of sustained growth. This can be as a result of higher export volumes which would mean an increase in international competitiveness as countries find it cheaper to purchase g/s as opposed to when higher inflation levels increase the cost of the g/s. Therefore domestic producers are positively impacted thus improving Australia's CAD. Also low inflation can boost confidence within the economy as the cost of g/s is relative to their natural value meaning there is no distortion of the price of g/s. This may lead to periods of prosperity is which facilitated through expansionary stances rather than contractionary stances such as increases in the interest rates attempting to curb high inflation, curtailing growth.

Are more points needed?

 

[Intrinsic]

Analyse the benefits of a sustained period of low inflation on Australia’s economic performance (5 marks)

A sustained period of low inflation indicates that Australia's economy is within the targeted bands of 2-3%. This can further indicate that Australia is in a period of sustained growth. This can be as a result of higher export volumes which would mean an increase in international competitiveness as countries find it cheaper to purchase g/s as opposed to when higher inflation levels increase the cost of the g/s. Therefore domestic producers are positively impacted thus improving Australia's CAD. Also low inflation can boost confidence within the economy as the cost of g/s is relative to their natural value meaning there is no distortion of the price of g/s. This may lead to periods of prosperity is which facilitated through expansionary stances rather than contractionary stances such as increases in the interest rates attempting to curb high inflation, curtailing growth.

Are more points needed?

For a 5 marker, I think it's essential to refer to contemporary issues where low levels of inflation has benefited the Australian economy! A good example would be an inflation rate of 1.5% in 2008-09 (GFC) from 3.4% in 2007-08, which is a contributing factor to Australia avoiding a recession with an EG rate of 1.3%, in comparison to OECD average of -.5%

Good effort though

 

[mreditor16]

Analyse the benefits of a sustained period of low inflation on Australia’s economic performance (5 marks)

A sustained period of low inflation indicates that Australia's economy is within the targeted bands of 2-3%. This can further indicate that Australia is in a period of sustained growth. This can be as a result of higher export volumes which would mean an increase in international competitiveness as countries find it cheaper to purchase g/s as opposed to when higher inflation levels increase the cost of the g/s. Therefore domestic producers are positively impacted thus improving Australia's CAD. Also low inflation can boost confidence within the economy as the cost of g/s is relative to their natural value meaning there is no distortion of the price of g/s. This may lead to periods of prosperity is which facilitated through expansionary stances rather than contractionary stances such as increases in the interest rates attempting to curb high inflation, curtailing growth.

Are more points needed?

Just some feedback:

The bolded part is too big and too general an assumption. You can never outright say low inflation = sustained EG

Also, the italicised part is a bit jumbled and incoherent.

Furthermore, you need to fully explain how and why Australia's CAD is improved. Properly draw it out.

Lastly, the answer as a whole has no flow and is a bit mishy-mashy, and isn't clear enough. So try to improve on that.

 

[Colemans]

thank guys

 

[Colemans]

A good example would be an inflation rate of 1.5% in 2008-09 (GFC) from 3.4% in 2007-08, which is a contributing factor to Australia avoiding a recession with an EG rate of 1.3%, in comparison to OECD average of -.5%

Is there any other major statistics that highlights how a low inflation rate benefits the economy? I feel like i'd need some more If my response is going to be more statistical though nothing else comes to mind.

 

[mreditor16]

Is there any other major statistics that highlights how a low inflation rate benefits the economy? I feel like i'd need some more If my response is going to be more statistical though nothing else comes to mind.

for that sort of Q, i.e. "Analyse the benefits of a sustained period of low inflation on Australia’s economic performance (5 marks)"

you can definitely get 5/5 for this question without stats. besides, chucking a stat in might be irrelevant or might not slot nicely in, and then that may actually detract from your answer. besides, you're wasting time if you're memorises stats as specific as like those mentioned by Intrinsic.

 

[dunjaaa]

Analyse how microeconomic reforms promote structural change. (5 marks)

 

[Intrinsic]

Is there any other major statistics that highlights how a low inflation rate benefits the economy? I feel like i'd need some more If my response is going to be more statistical though nothing else comes to mind.

You really shouldn't go out of your own way to memorise stats. But keeping up with the news and Australia's current economic performance will allow you to have a bank of stats in mind on a range of economic issues. Although stats aren't needed in certain short answer questions, it is important to keep in mind that it is a distinguishing feature in top responses.

 

[goobypls]

Can someone help me I'm struggling to understand the government policies that are used to achieve external stability, and also understanding the ins and outs of the federal budget in better detail.

 

[StateRank]

Sorry if I am breaking thread rules, but I was just wondering whether in a question that explicitly asks for 'government policies', if we could mention monetary policy as well?
Getting conflicting answers from people, although it seems the hsc markers do accept it.

 

[mreditor16]

Sorry if I am breaking thread rules, but I was just wondering whether in a question that explicitly asks for 'government policies', if we could mention monetary policy as well?
Getting conflicting answers from people, although it seems the hsc markers do accept it.

yeh this is a common dilemma I hear of. I’ve heard that, at some schools, they don’t accept monetary policy as something you can talk about if the questions asks for government policies.

However, this is schools being nitty-picky. And in the HSC, it will be fine. I even confirmed this with a senior marker at the HSC once. He said that if they did do that, then half the state would be losing marks for it, so there is no reason to do such a thing.

And besides, it’s not technically that wrong. It’s just that RBA conducts it on behalf of the government. In your answer, you might want to include that italicised part, just to show the marker you are answering the question and that you do realise that the government doesn’t directly implement monetary policy, but instead through the RBA.

In summary, yes you can talk about in the HSC. The conflicting answers simply arise because some teachers get a bit too OCD and you know ass-like, and don’t accept it. In the HSC, it will be fine.

 

[Colemans]

Is it possible to differentiate between cost push inflation and stagflation?

 

[dragerx]

Is it possible to differentiate between cost push inflation and stagflation?

Stagflation is the scenario in which both Inflation and Unemployment are high, which poses problems for economists as most solutions for both components (Inflation and Employment) rely on the relationship seen in the Philips curve. That is because solutions that lower inflation, usually inadvertently cause a increase in unemployment.
Cost Push Inflation refers to the changes in AS (being resultant from changes in the prices of factors of production such as wages and resources) that cause a change in inflation.
The two terms are not really that similar except for them both addressing a scenario relating to inflation.

 

[enigma_1]

Continuee

 

[enigma_1]

Explain TWO positive effects of inflation. (2 marks)

 

[enigma_1]

^ someone

 

[dim-sims]

1. Confidence in the share/real estate market can lead to asset price inflation. Peeps can then sell their assets they might have before this speculative boom at inflated prices and therefore more money in their pocket.
2. The only other benefit that I've found is that it prevents deflation for happening.

Must admit I did cheat by looking at my notes/textbooks because I haven't gotten up to the issues in terms of revision yet (really should get a move on, I know)


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[dim-sims]

Explain TWO positive effects of inflation. (2 marks)

1. Confidence in the share/real estate market can lead to asset price inflation. Peeps can then sell their assets they might have before this speculative boom at inflated prices and therefore more money in their pocket.
2. The only other benefit that I've found is that it prevents deflation for happening.

Must admit I did cheat by looking at my notes/textbooks because I haven't gotten up to the issues in terms of revision yet (really should get a move on, I know)


Sent from my iPod touch using Tapatalk

 

[dragerx]

1. Confidence in the share/real estate market can lead to asset price inflation. Peeps can then sell their assets they might have before this speculative boom at inflated prices and therefore more money in their pocket.
2. The only other benefit that I've found is that it prevents deflation for happening.

Must admit I did cheat by looking at my notes/textbooks because I haven't gotten up to the issues in terms of revision yet (really should get a move on, I know)


Sent from my iPod touch using Tapatalk

+ Increased utility of consumers due to increased income with a rise in wages from the the wage-price spiral. LOL, it would only be a placebo as disposable income would remain the same