HSC 2015 Economics Marathon (8 Viewers)

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

Describe the ways the labour force participation rate would increase - 3 marks

LF participation rate would increase if the Labour Force (i.e. unemployed + employed) was increasing. For the labour force to increase, more individuals will have to be actively seeking work to be classified as unemployed. The labour force participation rate would also increase if the working age population fell but the labour force remained the same.

Anything else?

 

[Ekman]

Re: 2015 HSC Economics Marathon

LF participation rate would increase if the Labour Force (i.e. unemployed + employed) was increasing. For the labour force to increase, more individuals will have to be actively seeking work to be classified as unemployed. The labour force participation rate would also increase if the working age population fell but the labour force remained the same.

Anything else?

My points were:
-Increase retirement age
-Decrease the leaving school age
-Decrease level of income tax rate or increase the tax-free threshold
-Increase in the level of economic activity
-Microeconomic reform

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

That doesn't make sense, because GNI per capita is measured by dividing the total income by the population. Are you sure the question didn't ask about the GINI coefficient, because then the question would make sense.

No it was GNI/ capita
I assumed the unequal distribution of income because if there is a variation in GNI/capita then that could indicate an increase in inequality, which would lower the GNI/capita but not really affect the HDI...

 

[Ekman]

Re: 2015 HSC Economics Marathon

No it was GNI/ capita
I assumed the unequal distribution of income because if there is a variation in GNI/capita then that could indicate an increase in inequality, which would lower the GNI/capita but not really affect the HDI...

GNI per capita is a very poor indicator of income distribution because consider this hypothetical economy, where there exists only 10 people and there is $20 total income. The GINI coefficient is 1, meaning only 1 person has the entire money (all of the $20) and the remaining 9 people have nothing. The GNI per capita in this economy would be $2 per person. See how that GNI per capita is a poor indicator of distribution of income, because it just calculates the total income per individual, whereas the GINI coefficient calculates the percentage of income owned by whatever percentage of poor or rich people.

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

Wouldn't the increase in retirement age increase the WAP?

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

yep okay thx

 

[Ekman]

Re: 2015 HSC Economics Marathon

Wouldn't the increase in retirement age increase the WAP?

The retirees are already considered in the working age population anyway, the only thing that classifies it as the working age population is people aged 15+. An increase in retirement age will increase the unemployment levels, which increased the labour force participation rate.

You are probably wondering about reduction in the school leaving age, I believe that it is legal to leave school at the age of 17 but if you decrease that further, you will increase the unemployed people as people will leave school early and seek for jobs

 

[Ekman]

Re: 2015 HSC Economics Marathon

What are the negative impacts of fast, unsustainable economic growth? - 4 marks

Edit: I would make it 5 marks, but if you can explain 4 solid impacts very well, then it will be just as good as 5 impacts.

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

Explain the reasons for differences in the standard of living between two nations (4)

Is this in relation to a case study?

 

[Ekman]

Re: 2015 HSC Economics Marathon

Explain the reasons for differences in the standard of living between two nations (4)

Is this in relation to a case study?

Well if it was worth a bit more then it would be based on a case study, but it seems like the questions is rather asking about general points, such as:
-Differing levels of government expenditure on learning
-Differing levels of government expenditure on health (I made two points because they are two separate factors that are taken into consideration when calculating HDI - plus also to fill up lines )
-Differing level of technological advancements
-Differing levels of GDP growth and level of population
-Differing impacts on the environment.
-Differing levels of skills required for jobs (this ties back to the first point I made), also the differing levels of real income and wages

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

What are the negative impacts of fast, unsustainable economic growth? - 4 marks

Edit: I would make it 5 marks, but if you can explain 4 solid impacts very well, then it will be just as good as 5 impacts.

Unsustainable economic growth can result in increased inflation (particularly demand pull inflation) due to the increase in demand for goods. The increase in prices due to inflation will result in the wage spiral index, involving individuals negotiating for increase in wages due to the increase in prices. Furthermore, this may lead to unemployment as the increase in wages may reduce profitability of employers.

Unsustainable economic growth may also lead to a currency appreciation. This appreciation will result in an increase in export prices, which will reduce the international competitiveness of an economy and thus in the long run, deteriorate the terms of trade.

The appreciation from the unsustainable economic growth will also result in an increase in M spending, thus increasing the CAD.

Unsustainable economic growth also reduces investment inflows into the economy due to the loss of foreign investor confidence due to the unpredictability of the economies economic conditions.

 

[Ekman]

Re: 2015 HSC Economics Marathon

Unsustainable economic growth can result in increased inflation (particularly demand pull inflation) due to the increase in demand for goods. The increase in prices due to inflation will result in the wage spiral index, involving individuals negotiating for increase in wages due to the increase in prices. Furthermore, this may lead to unemployment as the increase in wages may reduce profitability of employers.

Unsustainable economic growth may also lead to a currency appreciation. This appreciation will result in an increase in export prices, which will reduce the international competitiveness of an economy and thus in the long run, deteriorate the terms of trade.

The appreciation from the unsustainable economic growth will also result in an increase in M spending, thus increasing the CAD.

Unsustainable economic growth also reduces investment inflows into the economy due to the loss of foreign investor confidence due to the unpredictability of the economies economic conditions.

Solid answer. Just to add a bit more to it:
-The appreciation causes the 'Dutch Disease', hence structural unemployment
-Also as individuals try to spend and consume, there would be a reduction in national savings
-And it puts constraints on macroeconomic policies to control the unsustainable economic growth.
-Also the environmental impacts, hence as businesses try to keep up with the increase in aggregate demand, they care less about the environment
-Finally it makes a less equitable distribution of income, as the high income earners earn more from the profits from businesses.

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

Describe two measures of economic development (2)

The most popular method for comparing living standards between different economies is income (GNI), because it measures the ability of a nation’s citizens to satisfy their material wants.

HDI: alternative to GNI, takes into account life expectancy at birth, levels of educational attainment, GNI/ capita

Gini Coefficient?

 

[Ekman]

Re: 2015 HSC Economics Marathon

Describe two measures of economic development (2)

The most popular method for comparing living standards between different economies is income (GNI), because it measures the ability of a nation’s citizens to satisfy their material wants.

HDI: alternative to GNI, takes into account life expectancy at birth, levels of educational attainment, GNI/ capita

Gini Coefficient?

Refer to my other post, where I listed the differences between living standards and pick out two.

Probably the best two would be HDI and GINI coeffienct, but the ESD and relative poverty line are important too

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

Analyse how international organisations contribute to the growth of globalisation (5)
International organisations play a main role in maintaining the financial stability and monitoring economies to maintain efficient functioning.
The World Trade Organisation is the main group promoting free trade. The shift towards trade liberalisation is to encourage economies to specialise in goods and services in which they have a comparative advantage in. This leads to a growth in globalisation as economies freely trade products in which they are efficient in, leading to greater global interaction and integration.
The IMF maintains financial stability and prevents and helps economies in balance of payment crises. The IMF also contributes to the growth in globalisation as it encourages economies to undertake their structural adjustment policies before receiving help from it; these SAPs involve things such as deregulation of markets, liberalisation of trade etc, all methods which create greater convergence in an economy and thus promote globalisation.
The OECD aims to achieve high levels of economic growth and development through promotion of trade liberalisation and financial deregulation. Furthermore, this aim to promote sustainable economic growth leads to globalisation as emerging economies of the OECD try to replicate the policies implemented by the advanced economies of the OECD.
The WB provides developmental funds to developing economies. The lending of funds for social infrastructure projects in the poorest developing countries and the alleviation of poverty through aid and development projects in the developing world, encourages globalisation as it advices these developing economies on how to increase economic growth, decrease unemployment and increase trade flows. This advice includes policies that increase globalisation.
The UN also contributes to globalisation as it promotes increasing exports to achieve economic growth and development. It also aims to create a positive climate for investment which further encourages globalisation.

I dont see anything else that can be added... This answer needs to be more concise

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

Explain two reasons why a government would choose to use a subsidy instead of a tariff (4)

Subsidies lead to a retaliation effect as it is an indirect form of protection. Tariffs cause a retaliation, and reduces level of imports into the economy.
Domestic producers supply a greater quantity of the good. Therefore, the subsidy stimulates domestic production and employment in the protected industry
Tariffs could result in inflation as increases the prices of goods and services (both from foreign producers and domestic producers). Oppositely, subsidies lower cost for consumers, as producers can produce a larger sum of goods at a lower price.

 

[Ekman]

Re: 2015 HSC Economics Marathon

Explain two reasons why a government would choose to use a subsidy instead of a tariff (4)

Subsidies lead to a retaliation effect as it is an indirect form of protection. Tariffs cause a retaliation, and reduces level of imports into the economy.
Domestic producers supply a greater quantity of the good. Therefore, the subsidy stimulates domestic production and employment in the protected industry
Tariffs could result in inflation as increases the prices of goods and services (both from foreign producers and domestic producers). Oppositely, subsidies lower cost for consumers, as producers can produce a larger sum of goods at a lower price.

I don't like this reason.

Another reason is because subsidies allow domestic businesses to achieve economies of scale faster, allowing them to become more internationally competitive, whereas tariffs just allow domestic businesses to become competitive on a domestic level.

 

[Ekman]

Re: 2015 HSC Economics Marathon

Analyse how international organisations contribute to the growth of globalisation (5)
International organisations play a main role in maintaining the financial stability and monitoring economies to maintain efficient functioning.
The World Trade Organisation is the main group promoting free trade. The shift towards trade liberalisation is to encourage economies to specialise in goods and services in which they have a comparative advantage in. This leads to a growth in globalisation as economies freely trade products in which they are efficient in, leading to greater global interaction and integration.
The IMF maintains financial stability and prevents and helps economies in balance of payment crises. The IMF also contributes to the growth in globalisation as it encourages economies to undertake their structural adjustment policies before receiving help from it; these SAPs involve things such as deregulation of markets, liberalisation of trade etc, all methods which create greater convergence in an economy and thus promote globalisation.
The OECD aims to achieve high levels of economic growth and development through promotion of trade liberalisation and financial deregulation. Furthermore, this aim to promote sustainable economic growth leads to globalisation as emerging economies of the OECD try to replicate the policies implemented by the advanced economies of the OECD.
The WB provides developmental funds to developing economies. The lending of funds for social infrastructure projects in the poorest developing countries and the alleviation of poverty through aid and development projects in the developing world, encourages globalisation as it advices these developing economies on how to increase economic growth, decrease unemployment and increase trade flows. This advice includes policies that increase globalisation.
The UN also contributes to globalisation as it promotes increasing exports to achieve economic growth and development. It also aims to create a positive climate for investment which further encourages globalisation.

I dont see anything else that can be added... This answer needs to be more concise

The G8 and G20 are very important points to state here, as they are just organisations that comes together to coordinate global trade and financial flows, for the purpose of letting the global economy prosper. Since they consist of countries that have large impacts on global growth, their meetings allow them to contribute further for the prosperity of economic growth

 

[Study_like_a_nerd]

Re: 2015 HSC Economics Marathon

I don't like this reason.

Another reason is because subsidies allow domestic businesses to achieve economies of scale faster, allowing them to become more internationally competitive, whereas tariffs just allow domestic businesses to become competitive on a domestic level.

Oh lol I made a typo
Subsidies DO NOT lead to a retaliation effect

 

[Ekman]

Re: 2015 HSC Economics Marathon

Explain how one macroeconomic policy and one microeconomic policy could be used to improve Australia's external stability position? - 4 marks