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March 29, 2024, 12:33:06 pm

Author Topic: Please review my answers.  (Read 937 times)  Share 

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chikopapi

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Please review my answers.
« on: April 19, 2008, 02:13:07 pm »
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Hey all!

Gotta hand in some questions for Eco 3/4. Been working on them today and I think I've got them fairly well done.

The questions were (as posted in other thread):

Quote
Using the Forsyth forumula......Outline ONE demand factor and ONE supply factor that has contributed to economic growth in the economy between 2000-01 to 2006-7.

Outline ONE demand factor and ONE supply factor that has contributed to restrainingeconomic growth in the economy between 2000-01 to 2006-7.

If you are unaware as to what the Forsyth formula is...it is the way of explain how factors effect things by linking through the process on how it does it, not just jumping to the result (eg. interest rates -> decrease eco growth), but instead going through it.

So here are my answers....

Would appreciate any revisions, suggestions, corrections, anything can you suggest to make it better.  ;)

Quote
One demand factor that has contributed to Economic growth in the economy over the period 2001-01 to 2006-7 has been changes in the level of real household disposable income. Expenditure depends mainly on disposable income (income after income tax has been taken by the government). The more consumers earn, the higher their spending can be, which increases consumption, therefore increasing aggregate demand, and therefore higher economic growth as result of more production of goods and services due to the profit motive that exists from the higher demand.  This can be seen in the 2004 period when the level of disposable income increased to 8% while GDP growth as relatively high at 4.25, in comparison to the 2001period when the level of disposable income was -2.7% and economic growth was around 1.9%.

One supply side factor that has contributed to Economic growth in the economy has been the labour force participation rate. From 2001-2007, the participation rate has increased  from approximately 63.5% to 65.2%. This is possible due to an increase in the size of the labour force due to population growth and increased availability of work opportunities in recent years from high economic activity. The increased labour force participation rate has led to a greater number of productive resources, thus increasing the productive capacity, greater productive output, increasing Aggregate supply, leading to higher GDP and therefore economic growth. When the productive capacity is increased, Australia can sustain higher rates of economic growth without causing inflation.

One demand side factor that has restrained economic growth over this time has been the rise of the Australian dollar in comparison to the $US – one of our major trading partners. Between 2001 to 2007, the value of the $A has increased from approx. US$0.55 to US$0.88. As a result of the rise in the Australian dollar, coinciding with a depreciating US dollar, spending on exports has fallen, as a result of decreased demand from the greater cost to purchase these exports,  leading to decreased aggregate demand,  and consequently,  restrained economic growth as producers fail to make profit, and therefore decrease their production (leading to decreased GDP).

A supply side factor that has restrained economic growth from 2001-2007 has been the price of oil per barrel. From 2001, the price of oil has risen from approximately US$22 to US$97 in 2007. This increased cost of oil has increased the cost of production for producers in Australia, thereby restricting the amount of goods and services able to be produced, leading to a diminished productive output, lower Aggregate supply, and decreased economic growth.

Thanks

marbs

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Re: Please review my answers.
« Reply #1 on: April 19, 2008, 03:23:03 pm »
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seems pretty good. What you say is correct, except you might refer to figures more in assessing it more. My teacher loves us to average the pencentage and compare it to the government objectives.

If theres a minimum length you may need to extend it more
« Last Edit: April 19, 2008, 03:25:51 pm by marbs »

Eriny

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Re: Please review my answers.
« Reply #2 on: April 19, 2008, 04:03:30 pm »
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It seems good to me :)