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March 28, 2024, 10:46:38 pm

Author Topic: Economics Questions Thread  (Read 179164 times)  Share 

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Gentoo

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Re: Economics Questions Thread
« Reply #675 on: April 07, 2015, 01:08:36 pm »
+1
Yeah, movements along the curve are caused by situations where the price and quantity AREN'T in equilibrium (so essentially, directly after a shift in either the demand and supply curve has occurred), so the price/quantity will move ALONG either the supply or demand curve until it reaches the equilibrium point.

The 3 key economic decisions are what, how and for whom to produce?

The price system determines what to produce because firms will look to produce things that have a high relative price to obtain more profit.

The decision about how to produce is left to firms who want to maximise profit potential (I guess that falls under the umbrella of 'the price system'), who will produce goods and services in the most efficient/cost effective way in order to cut costs/maximise profits (because they have a direct incentive to - compared to, say, socialism where firms have bugger all reason to be efficient cause they'll get paid the same regardless from the government).

The decision about for whom to produce is answered by the price system because the people who have the greatest willingness to pay for goods and services are the ones who end up getting them (they're the ones who pay the price).
« Last Edit: April 07, 2015, 01:18:27 pm by Gentoo »

abcdqdxD

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Re: Economics Questions Thread
« Reply #676 on: April 08, 2015, 07:25:14 pm »
+2
Agree with everything Gentoo said, but here's my take on movements along a curve.

Essentially, a movement along a curve can be caused by two things:

(1) A change in price
(2) A shift in the 'other' curve

For example, for (1), if price increased from $10 to $15, there will be a contraction along the demand curve (consumers want less of something when it gets more expensive) and an expansion along the supply curve (suppliers want to sell more when selling price is higher due to profit motive).

For (2), a shift in the demand curve will cause a movement ALONG the supply curve. A shift in the supply curve will cause a movement along the demand curve.

I recommend taking some time to draw out your Supply and Demand graphs, draw out the two scenarios above and observe what is happening.

MayMacQueen

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Re: Economics Questions Thread
« Reply #677 on: June 01, 2015, 08:51:12 pm »
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Hello- I just wanted to ask how is Aggregate Demand (AD) overstated when G1 (Short term government spending) does NOT include transfer payments? I'm just unsure of the explanation as to why AD will be overstated.

Also can anyone tell me how Australia did not suffer a recession post GFC? As we did 'recover' well compared to other nations. Thank you  :) :)

Rachelle

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Re: Economics Questions Thread
« Reply #678 on: July 08, 2015, 07:02:47 pm »
+1
Hello- I just wanted to ask how is Aggregate Demand (AD) overstated when G1 (Short term government spending) does NOT include transfer payments? I'm just unsure of the explanation as to why AD will be overstated.

Also can anyone tell me how Australia did not suffer a recession post GFC? As we did 'recover' well compared to other nations. Thank you  :) :)

AD is overstated because the government is actually using its tax revenue to provide these welfare benefits. In other words, the govt is transferring the tax revenue it collects from from high income earners to low income earners. This is not accounted for in the G1 component and thus overstates AD. This tax revenue could have been appropriated to other areas of the economy; such as construction of infrastructure.

Australia has not experienced a recession as of post GFC mainly because the govt set out a relatively large fiscal action - which acted to stimulated AD + production flows.

Rachelle

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Re: Economics Questions Thread
« Reply #679 on: July 08, 2015, 07:04:33 pm »
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"The government taxes individuals on nominal interest earning rather than real, meaning savers will pay too much  tax and companies with large debts will pay less tax than they should."

I kind of get where this statement is getting from but if someone could explain in a little more detail that would be appreciated :) thanks!

cherryblossom

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Re: Economics Questions Thread
« Reply #680 on: July 09, 2015, 02:51:49 pm »
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I hope this isn't a stupid question but I was wondering why banks need to borrow money from other banks and what the role of the RBA was apart from setting the cash rate.

vanessa987

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Re: Economics Questions Thread
« Reply #681 on: November 07, 2015, 03:33:20 pm »
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does anybody by any chance have unit 2 notes (specifically on balance of payments and the dollar)?
I'm having trouble grasping these concepts.
would be much appreciated
thanks:)

vanessa987

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Re: Economics Questions Thread
« Reply #682 on: November 07, 2015, 03:33:50 pm »
0
does anybody by any chance have unit 2 notes (specifically on balance of payments and the dollar)?
I'm having trouble grasping these concepts.
would be much appreciated
thanks:)

AndyCau

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Re: Economics Questions Thread
« Reply #683 on: April 10, 2016, 01:42:06 pm »
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anyone have notes on economic growth in the last four years?

currently need it for this week's SAC.

thanks,, much appreciated

P.GUAN

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Re: Economics Questions Thread
« Reply #684 on: July 04, 2016, 11:28:46 pm »
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Hi guys,
What is a direct term of bonds? I am reading ways to finance a deficit and I can't get my head around for selling bonds.

Thanks guys!!

gracefaith

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Re: Economics Questions Thread
« Reply #685 on: July 09, 2016, 10:47:52 pm »
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The government can finance the deficit via the selling of bonds, they're basically IOU's that are purchased/bought off by investors. This means that in return the government is able to get cash to fund its deficit. Hope that helps!

Phoebe Thomas

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Re: Economics Questions Thread
« Reply #686 on: July 21, 2016, 07:22:54 am »
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Hey! Could someone tell me if it's correct to say that the 2016-17 budget is an 'expansionary budget of a contractionary nature', as there is a predicted deficit, though smaller than the previous financial year?
Thanx!

100.00

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Re: Economics Questions Thread
« Reply #687 on: September 24, 2016, 10:04:29 am »
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Hey! Could someone tell me if it's correct to say that the 2016-17 budget is an 'expansionary budget of a contractionary nature', as there is a predicted deficit, though smaller than the previous financial year?
Thanx!

I know its late but if you're still around :D (you've probably figured out the answer)
If im correct, you cant say that.
The current budget is predicted to be contractionary, as its going from something like a deficit of 39.9billion to 37.1 billion. Yes it is still a deficit, although it is mildly contractionary because it's trying to actively take money out of the economy from one fiscal year to the next, to restrict economic activity and aggregate demand.

You can still make reference to it still being a deficit and is stimulating the economy overall, however be careful in doing this if the question asked you just for the stance overall, as it will be uneccesary to put forth such information. The examiner doesn't want you putting forth information in an unconfident way.

Hope I helped!



Alicia23

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Re: Economics Questions Thread
« Reply #688 on: February 26, 2017, 03:50:58 pm »
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Hey everyone!
I just got 2 multiple choice questions that I don't entirely understand and it would be so great if someone could explain them to me.

1. Positive externalities may be conveyed to third parties by the production of
a) vaccines
b) chocolate
c) trees
d) nightclubs
The answer is d.

2. Higher petrol prices are most likely to result in all of the following except;
a) An increase in the demand for larger vehicles, like 4WDs
b) A higher price for LPG
c) An increased demand for public transport
d) An increased exploration effort by companies mining for oil
The answer is a)An increase in the demand for larger vehicles, like 4WDs,  which i get but why would there be a higher price for LPG?




nm4065

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Re: Economics Questions Thread
« Reply #689 on: March 02, 2017, 10:00:57 pm »
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Does anyone know how to answer this question: "explain why an economy must achieve productive efficiency in order to achieve allocative efficiency." (3 marks). Thanks!