HSC 2015 Economics Marathon (4 Viewers)

[teridax]

Re: 2015 HSC Economics Marathon

This is good stuff, although you may want to cut down the flowery language...

At times I found it hard to follow with the englishy words tbh

why is it not good to use englishy words tho

 

[Intrinsic]

Re: 2015 HSC Economics Marathon

why is it not good to use englishy words tho

You want to make your responses easy to read. Using flowery language, especially in economics, is not encouraged. Your responses should be concise and coherent in economics, which includes making life easier for the marker by avoiding the use of unnecessary words. Afterall, the markers are humans, and I'm sure you as a human would also appreciate easy-to-read responses; however, this doesn't mean that your response loses sophistication at all.

 

[Ekman]

Re: 2015 HSC Economics Marathon

You want to make your responses easy to read. Using flowery language, especially in economics, is not encouraged. Your responses should be concise and coherent in economics, which includes making life easier for the marker by avoiding the use of unnecessary words. Afterall, the markers are humans, and I'm sure you as a human would also appreciate easy-to-read responses; however, this doesn't mean that your response loses sophistication at all.

I agree with this also the sophistication from your responses should come from your use of economic jargon.

 

[Ekman]

Re: 2015 HSC Economics Marathon

Explain the limitations of both fiscal and monetary policy in addressing an economic slowdown (6 marks)

-Time lags. Despite fiscal policy's small implementation lag, changes in the fiscal policy occur annually, hence changes in the budget needs to account for every successive financial year.
Also changes in the monetary policy occur monthly, however there is a time lag of these chnagrd actually having an impact on economic growth.
Thus time lags greatly constraints the effectiveness of macroeconomic policies as changes in economic growth are very volatile.

-Objective conflicts. For monetary policy it is economic growth vs inflation or employment vs inflation. For fiscal policy it is economic growth vs maintaining a budget surplus or economic growth vs environmental sustainability.

-Political constraints. There generally is little to none political constraints for monetary policy as the general public does not vote Glenn Stevens out of his position in the RBA, so the monetary policy operates with little to no regard to politics.
However the fiscal policy on the other hand has a lot of political constraints as the PM generally makes economic conditions favorable for people in order to be re-elected. However this doesnt reduce its effectiveness in addressing economic slowdown but it does contribute to the conflict between macroeconomic objectives.

 

[RecklessRick]

Re: 2015 HSC Economics Marathon

There's another one I found in notes I bought (Rising asset prices may benefit speculators - who are able to increase their capital gain) but it doesn't really make sense to me, could someone explain it?

This is essentially the reason inflation encourages asset build up. This is because the nominal value of assets (for example, property) rise as the general price level rises, and essentially act as a store of value. Since physical cash stores and the like will erode in value, while property retains its non-monetary value, asset owners (not necessarily speculators) will feel less of the erosive power of inflation than those with fixed incomes or under-the-bed savings. This can be seen in the way in which the German upper class during the hyperinflation of the 1920s retained much of their wealth, since most of this wealth was in property or capital, and as such their store of wealth went relatively unscathed.

Similarly, the non-accelerating inflation rate of unemployment alludes at which there is no change inflation.

lol at this sentence

Explain the limitations of both fiscal and monetary policy in addressing an economic slowdown (6 marks)

If you're hardcore af, you can use the zero lower bound problem as a limitation for monetary.

 

[RecklessRick]

Re: 2015 HSC Economics Marathon

How far back do you have to refer to contemporary issues though? I thought things like the GFC (at the very least for the average eco student), the stagflation of the 1970-80s, 1997 Asian Crisis blah blah blah were sufficient

lol, this is what I did for one of my eco essays and I got slammed by my teacher rofl

is that even in the syllabus LOL

I mostly used this example because I'm a die hard for modern, and it's one of the best examples I can think of with regard to the asset rich retaining their store of wealth while those on fixed incomes were pretty screwed. I would tend not to use economic history in an essay simply because there's usually a good contemporary example, and the markers get pretty touchy about it since this often leads to people failing to use proper stats. That all being said, the most recent examples of hyperinflation are Zimbabwe (which is probably the best one to use here, but less charted in terms of the upper class retaining wealth, since the Zimbabwean upper class is relatively small) and Yugoslavia in the 90s, and then before that you have to go to WWII to find anything. But yeah, you're right, I just did it for convenience.

also, mirin your sig, dat 4U engrish and maffs (assuming you're a humanities person too judging by eco [obvs] and the 3 units of history)

Cheers, bruh. Humanities lyf.

 

[astab]

Re: 2015 HSC Economics Marathon

You're missing on 'O' between the 'K' and 'M' in your username.

 

[lpodtouch]

Re: 2015 HSC Economics Marathon

Outline one advantage and one disadvantage of bilateral trade agreements (4 marks)

 

[swagmeister]

Re: 2015 HSC Economics Marathon

Outline one advantage and one disadvantage of bilateral trade agreements (4 marks)

An advantage is that bilateral trade agreements will result in greater levels of free trade between the nations apart of them, meaning that there is true competition which will foster innovation and improvements in aggregate supply, leading to higher levels of national income and generating economic growth and higher living standards for the population. A disadvantage is that they can create trade diversion due to the fact that other countries may be more efficient at producing particular goods, however the trade agreement encourages the 2 countries in it to trade between each other rather than with other countries.

Mark /4?

"Explain two positive effects of unemployment on the economy" (4 marks)

 

[chboblie]

Re: 2015 HSC Economics Marathon

Ensures inflationary pressures are reduced as the unemployed have less disposable income through transfer payments, reducing demand pull inflation, and it also means that cost push inflation is low, as workers there is an excess supply of labour. Another positive effect of unemployment, is that as a result of this low inflation, Australia's international competitiveness will increase, resulting in higher exports, and because there is lower demand for imports, through the unemployed having low disposable incomes, it can increase the BOGS and therefore the CAD

-I made up the last one I don't really know

"Despite Australia's persistently high CAD, why is there currently little focus on increasing Australia's external stability"-4 marks

 

[Ekman]

Re: 2015 HSC Economics Marathon

An advantage is that bilateral trade agreements will result in greater levels of free trade between the nations apart of them, meaning that there is true competition which will foster innovation and improvements in aggregate supply, leading to higher levels of national income and generating economic growth and higher living standards for the population. A disadvantage is that they can create trade diversion due to the fact that other countries may be more efficient at producing particular goods, however the trade agreement encourages the 2 countries in it to trade between each other rather than with other countries.

Mark /4?

"Explain two positive effects of unemployment on the economy" (4 marks)

Ensures inflationary pressures are reduced as the unemployed have less disposable income through transfer payments, reducing demand pull inflation, and it also means that cost push inflation is low, as workers there is an excess supply of labour. Another positive effect of unemployment, is that as a result of this low inflation, Australia's international competitiveness will increase, resulting in higher exports, and because there is lower demand for imports, through the unemployed having low disposable incomes, it can increase the BOGS and therefore the CAD

-I made up the last one I don't really know

"Despite Australia's persistently high CAD, why is there currently little focus on increasing Australia's external stability"-4 marks

Just to add:
-Unemployment will cause people to want to attain new skills, if structural unemployment is occurring. Hence increasing the skills of the labour force
-It will cause the mobility of labour to move to different areas for jobs. Resulting in an increase in allocative efficiency of labour resources.
-Also it will result in people that are unemployed to save more (as they don't have any income), causing an increase in capital formation and national savings.

 

[RecklessRick]

Re: 2015 HSC Economics Marathon

Just to add:
-Unemployment will cause people to want to attain new skills, if structural unemployment is occurring. Hence increasing the skills of the labour force

Equally though, unemployment can lead to long term unemployment which will mean workers lose skills and motivation.

-It will cause the mobility of labour to move to different areas for jobs. Resulting in an increase in allocative efficiency of labour resources.

Yep, liquidity of the labour force is probably one of the better ones for this.

-Also it will result in people that are unemployed to save more (as they don't have any income), causing an increase in capital formation and national savings.

This is untrue. Those who are unemployed will have very low incomes and as such will spend a greater proportion of their income, since MPC increases as income decreases. This will reduce national savings and capital formation.

 

[astab]

Re: 2015 HSC Economics Marathon

Equally though, unemployment can lead to long term unemployment which will mean workers lose skills and motivation.


Yep, liquidity of the labour force is probably one of the better ones for this.


This is untrue. Those who are unemployed will have very low incomes and as such will spend a greater proportion of their income, since MPC increases as income decreases. This will reduce national savings and capital formation.

Hysteresis - nuff said.

 

[spatula232]

Re: 2015 HSC Economics Marathon

How do you differentiate between the NAIRU and full employment? I did one paper and it got me good

 

[astab]

Re: 2015 HSC Economics Marathon

How do you differentiate between the NAIRU and full employment? I did one paper and it got me good

tbh I thought they were the same thing. I thought they both referred to the rate at which cyclical unemployment is equal to 0 (the labour resource is employed to its fullest supply capacity) and any increases in real GDP will cause inflation. Once macroeconomic policies have eradicated all cyclical unemployment, the govt. will need to switch to MERs to lower structural unemployment (and frictional and seasonal). If they use macro policies beyond the natural rate, it will cause demand-pull inflation because increases in aggregate demand are unable to be matched my increases in AS.

 

[swagster0906]

Re: 2015 HSC Economics Marathon

Explain how the monetary policy can be used to influence the level of economic activity?

 

[aanthnnyyy]

Re: 2015 HSC Economics Marathon

Explain how the monetary policy can be used to influence the level of economic activity?

An expansionary monetary policy will reduce the official cash rate, (open market operations - buy commonwealth government securities, increasing exchange settlement accounts), as a result increasing liquidity in the market.
- by decreasing interest rates, consumption stimulates as cost of borrowing is cheaper (relatively) thus resulting in greater output; aggregate demand- GDP and increased employment opportunities
- also increase capital outflow as consumers will spend more on imports which could

And for contractionary pretty much vice versa - restricting AD

 

[lpodtouch]

Re: 2015 HSC Economics Marathon

Explain the economic reasons for differences in the standard of living between two nations (5 marks)

 

[simmyyy]

Re: 2015 HSC Economics Marathon

Hey guys, was just reading over the Tim Riley's disadvantages on a fixed exchange rate system which stated:
A country (such as Australia) does not react to external structural changes, as the exchange rate does not respond quickly and directly to changes in market forces or external real or financial shocks.

could someone explain/clarify what he's trying to say because it was a bit confusing for me to understand

 

[swagmeister]

Re: 2015 HSC Economics Marathon

Gonna chuck this one out here because no one is responding to the thread I made, but it would make a pretty decent HSC question anyway, comes right from the syllabus and would be an awesome differentiator

"Explain why inflation does not accelerate above the NAIRU" 4 marks