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September 24, 2020, 11:24:05 am

Author Topic: Economics Questions Thread  (Read 103594 times)  Share 

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pahm

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Re: Economics Questions Thread
« Reply #795 on: March 17, 2020, 01:25:15 pm »
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Hey Guys,

Doing VCE economics 3/4 this year, and was wondering how you answer the "explain" questions? Just coz they're really prominent in all my SACs, and would like some advice.

Also if you have any tips for SAC's coz this is my first 3/4, would love help.

Thank youu :))

My teacher said the stuff to include are 1, definitions of any key concepts mentioned in the question and 2, examples if needed (for questions with 2+ marks)
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j8son

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Re: Economics Questions Thread
« Reply #796 on: August 11, 2020, 01:00:43 pm »
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Hi i am currently in year 10 and i just moved into economics and i am really behind ive done some questions but i dont understand these 1s. Thank you for reading.
1. Fully explain the effect of a increase in consumer confidence on the standard of living in the Australian
economy.
2. Fully explain the effect of a decrease in interest rates on the standard of living in the Aust economy.
3. Fully explain an increase in demand for our iron ore by China, on Australia’s goal of eco growth.
4. Fully explain the effect of an increase in labour wages on AS.
5. If the AUD depreciated, fully explain the effect on AS & our productive capacity.
6. Fully explain the effect on AD & the goal of economic growth, if the AUD appreciated.

justaloser

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Re: Economics Questions Thread
« Reply #797 on: August 11, 2020, 01:29:58 pm »
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Hi i am currently in year 10 and i just moved into economics and i am really behind ive done some questions but i dont understand these 1s. Thank you for reading.
1. Fully explain the effect of a increase in consumer confidence on the standard of living in the Australian
economy.
2. Fully explain the effect of a decrease in interest rates on the standard of living in the Aust economy.
3. Fully explain an increase in demand for our iron ore by China, on Australia’s goal of eco growth.
4. Fully explain the effect of an increase in labour wages on AS.
5. If the AUD depreciated, fully explain the effect on AS & our productive capacity.
6. Fully explain the effect on AD & the goal of economic growth, if the AUD appreciated.

So I'm getting that you're currently doing AD, is this Unit 2?
Think about AD like a math equation - C+I+G+X-M*. If you increase the quantity of C, then AD increases right. If you decrease the quantity of X, AD decreases. This equation is super important in Economics so you should both understand it and memorise it

*AD = Consumption + Capital Investment + Government Expenditure + Exports - Imports .

So for questions 1, 2, 3, 6:
Basically you need to revise your components of AD* so that if you see a question relating to AD, you can think, "which component of AD does this relate to?" and/or "which factor affecting AD is relevant". In question 3 the relevant factor is overseas demand and the component is exports. The second part of the questions eg. "impact on eco. growth" or "impact" really just relate to AD. So you should revise how changes in AD affect standards of living, goal of econ. growth etc. So going back to question 3, since there's more demand for exports, then exports increase and AD increases. Since increased AD increases economic growth, then would we be closer to reaching our economic growth goal? (considering target range is 3-3.5% and we're below that).

Hopefully that helps, you can DM me for a better explanation.
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j8son

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Re: Economics Questions Thread
« Reply #798 on: August 12, 2020, 09:53:15 am »
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any1 know how to do this question?

1) If the AUD depreciated, fully explain the effect on AS and our productive capacity.
(aggregate supply)
Thank you for reading

dskel

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Re: Economics Questions Thread
« Reply #799 on: August 26, 2020, 12:39:20 am »
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any1 know how to do this question?

1) If the AUD depreciated, fully explain the effect on AS and our productive capacity.
(aggregate supply)
Thank you for reading

A depreciation of the AUD is likely to have a negative effect on aggregate supply. A depreciation means Australians are required to exchange more Australian dollars for the same amount of foreign currency, as the value of foreign currency rises relative to the Australian dollar. Therefore, the cost of foreign goods and services will, ceterius paribus, increase. Firms who need to import inputs (intermediate goods) such as refined natural resources, for example, will have to pay a higher price which increases cost of production. Furthermore, the importation of capital such as factory machinery will also become more expensive, further increasing the cost of production. An increase in cost of production reduces per unit profits which reduces for profit-maximising firms the incentive to produce, decreasing aggregate supply.

Productive capacity is the maximum possible sustainable output of an economy. Higher AUD in decreasing the availability of suppliers to obtain capital will reduce the potential output of an economy as labour will be less productive with relatively less capital (tools and machines). Therefore, decreasing the efficiency of firms and reducing the economy's productive capacity.