Economics: Discussion, Questions & Potential Solutions

[bgladman]

For cad a bit of economics in practise the steady increase in us interest rates over the year has meant an appreciating usd making aud relatively cheap in commodities markets leading to increased exports to china which if you watched news tonight this has led to a trade balance surplus which will decrease current account deficit... though note trade deficit with America were more inelastic imports has meant slower movement towards surplus where our commodities quoted in usds are more elastic so trade surplus is renewed quicker... I've heard j curve outside course but may interest you 

Are you in year 12?

[Chelsea f.c.]

No but I've answered q's over the year in the forum so hope you all did well  I just thought it might interest...

[bgladman]

No but I've answered q's over the year in the forum so hope you all did well  I just thought it might interest...

Do you think commodity price changes would get marks in the CAD question?

[Chelsea f.c.]

Current account is trade balance plus returns on capital as Australia's main export is minerals/commodities I believe it would definitely be relevant to trade balance and hence cad 

[DoctorTwo]

For the AD/chosen goal tax policy question (2nd last Q) and the last question (a certain area with effect on AS and a goal of your choice) what did everyone choose?

I think for the tax one I spoke about the changes to income tax rates, with the 32.5% bracket maximum changing from $87,000 to $90,000, and used the goal of low inflation and then for the last one I used welfare policy and the goal of full employment.

Yes it's wrong. An improvement in the TOT would mean the prices received for our exports have increased relative to prices paid for imports, increasing a trade balance surplus and contributing to a current account surplus. A fall would mean imports are more expensive, creating a trade deficit and a deterioration of the current account

:/ Hopefully I at least get one of the three marks for something.

[oJL8A99A]

Tightening welfare eligibility by increasing the pension age from 65 to 67 over 2018-2023 --> Increase labour participation causing AS to rise.

Oh wait the second last one ... falling company tax and it's impact on improving investment expenditure to raise AD.

[Elyou4]

Did anyone get higher economic growth from higher disposable income with the Personal Income Tax Plan conflicting with the goal of SSEG as eco growth was 3.4%?Also improving AS through subsides conflicting with RBA’s goal of low inflation as inflation is currently at 1.9%?

[Chelsea f.c.]

Don't know what sseg is so please define... an increase in aggregate supply would shift supply curve to the right, increasing output for each unit of inflation, where it would intersect with demand at a lower point and decrease inflation

[Elyou4]

Don't know what sseg is so please define... an increase in aggregate supply would shift supply curve to the right, increasing output for each unit of inflation, where it would intersect with demand at a lower point and decrease inflation

Strong and Sustainable Economic Growth 

[Chelsea f.c.]

Ok pity we don't learn that at uni (would help in policy  ) but yes if tax cuts are unfunded then using tax cuts to increase ad may have bad consequences in the future given they are hard to reverse 

And above you were referring to inflation being too low I.e. Below 2-3 percent? If so good answer

[Vri123]

Do you think commodity price changes would get marks in the CAD question?

Yes i used commodity price trends over the past two years and the rba chart shows similar trends in commodity prices to that of the trend in the current account deficit.

[lifeisgood]

The exam was sooooo easy. Much better than last year.

[DoctorTwo]

Anybody got a copy of it yet?

[BrandtKakulas]

Yo, does anyone have a copy of the exam or the multiple choice answers?

If so, could you send it through?