Help- miscellaneous questions on eco (1 Viewer)

[YouCantMakeMe]

1.) Why do trading blocs slow down globalisation? Wouldn't it speed it up due to increases in free trade?

2.) Which of the following is the most likely impact of globalisation on environmental sustainability?

• 
  A.) A greater depletion of natural resources
  B.) An increased cooperation between countries to resolve environmental issues
  C.) An increase in the level of merit goods provided by the government
  D.) A decrease in the tragedy of the commons]

Why not B? Answer is A.

3.) What is a possible advantage of a bilateral trade agreement?

• A.) It is non-exclusive and easier to formulate.
  B.) It allows for increased flexibility for parties to the agreement.

Answer is B. Why not A? (what does it mean by non-exclusive in this sense? o-o)

4.) The world price of Good A is $20 and the tariff on Good A is $10. Foreign producers sell 500 units of Good A into the Australian economy. What is the total foreign producers revenue? (Is it 500 * 10?)

5.) Why would an increase in Australia's national minimum wage increase the size of the CAD? If anything, wouldn't it decrease the CAD due to an increase in national savings?

 

[YouCantMakeMe]

6.) Which scenario best demonstrates the benefits of a fixed exchange rate?

• A.) A country experiencing a recession fixes is currency to that of a country in which interest rates are high.
  B.) A country experiencing a boom fixes its currency to that of a country experiencing a recession
  C.) A country experiencing a recession fixes its exhange rate above the equilibrium rate
  D.) A country experiencing a boom fixes its exchange rate below the equilibrium rate.

 

[sy37]

1.) Why do trading blocs slow down globalisation? Wouldn't it speed it up due to increases in free trade?

2.) Which of the following is the most likely impact of globalisation on environmental sustainability?

• 
  A.) A greater depletion of natural resources
  B.) An increased cooperation between countries to resolve environmental issues
  C.) An increase in the level of merit goods provided by the government
  D.) A decrease in the tragedy of the commons]

Why not B? Answer is A.

3.) What is a possible advantage of a bilateral trade agreement?

• A.) It is non-exclusive and easier to formulate.
  B.) It allows for increased flexibility for parties to the agreement.

Answer is B. Why not A? (what does it mean by non-exclusive in this sense? o-o)

4.) The world price of Good A is $20 and the tariff on Good A is $10. Foreign producers sell 500 units of Good A into the Australian economy. What is the total foreign producers revenue? (Is it 500 * 10?)

5.) Why would an increase in Australia's national minimum wage increase the size of the CAD? If anything, wouldn't it decrease the CAD due to an increase in national savings?

1) Trading blocs don't promote free trade on a globalised scale as is in the case for globalisation, rather it is between a select group of member countries, usually within a regional basis. An example is the EU which as a policy called the Common Agricultural Policy. As a result of this agricultural tariff, Australia cannot export as much to the EU region, hence less global trade and less globalised economy etc.

2) Post reasons why you think it is B and not A. Do you factor in things such as TNCs, and the number of developed / advanced economies that may have differing priorities?

3) Bilateral means between two people meaning it is exclusive to other countries . It is however easier to formulate

4) 20 * 500. The $10 tariff is transferred to the government

5) Businesses need to spend more to hire the same amount of people, look at arguments relating to decentralisation / centralisation here esp. relating to productivity.

 

[aanthnnyyy]

1) trading blocs slow free trade because it redirects trade away e.g. UK and Australia before EU- australia now shifted trade towards asia

2) it says 'most likely', and so the likelihood of depletion is greater than resolving environmental issues because of 'economic convergence' where developing economies transition to developed economies through rapid economic growth -> opportunity cost natural resources

3) it actually can't be (a) because bilateral trade agreements are exclusive since they are between two nations only (correct me if I'm wrong here)

 

[YouCantMakeMe]

6.) Which scenario best demonstrates the benefits of a fixed exchange rate?

• A.) A country experiencing a recession fixes is currency to that of a country in which interest rates are high.
  B.) A country experiencing a boom fixes its currency to that of a country experiencing a recession
  C.) A country experiencing a recession fixes its exhange rate above the equilibrium rate
  D.) A country experiencing a boom fixes its exchange rate below the equilibrium rate.

7.) What is the equilibrium level of income if C=100+0.8Y and I= 40 million? completely lost on this one

 

[YouCantMakeMe]

Is an outwards shfit in the Lorenz curve = more equal or less equal?

 

[atargainz]

Is an outwards shfit in the Lorenz curve = more equal or less equal?

Inwards is more equal, outwards is less equal. The straight diagonal line is the line of perfect equality

 

[YouCantMakeMe]

Could you check reasoning? Thoughts are in brackets.

Q9. ) Which of the following combinations are most likely to ease cost-push inflationary pressures in the Australian economy?

• A.) A decrease in the size of the budget deficit and an increase in the minimum wage
  (increasing minimum wage will lead to higher cost of production = higher inflation)
  
  B.) Decentralised wage determination an a decrease in the minimum wage
  (how does centralised/ decentralised wage fixing impact on cost-push inflation? Or more specifically, how does decentralised wage fixing ease cost-push inflation by decreasing wages?)
  
  C.) An appreciation of the AUD and centralised wage determination
  (Is imported inflation only when the AUD depreciates?)
  
  D.) An increase in the size of the budget surplus and a reduction in AD
  (Increase in budget surplus = more taxes = leading to higher cost of production = cost-push inflation. But lower AD = lower prices. Wouldn't that lead to lower inflation?
  
  Thanks!

 

[lpodtouch]

Could someone please answer this qn:
Assess the consequences of an unequal distribution of income and wealth.

 

[atargainz]

Q9. ) Which of the following combinations are most likely to ease cost-push inflationary pressures in the Australian economy?

• A.) A decrease in the size of the budget deficit and an increase in the minimum wage (increasing minimum wage will lead to higher cost of production = higher inflation)
  
  B.) Decentralised wage determination an a decrease in the minimum wage (how does centralised/ decentralised wage fixing impact on cost-push inflation? Or more specifically, how does decentralised wage fixing ease cost-push inflation by decreasing wages?)
  
  C.) An appreciation of the AUD and centralised wage determination (Is imported inflation only when the AUD depreciates?)
  
  D.) An increase in the size of the budget surplus and a reduction in AD (Increase in budget surplus = more taxes = leading to higher cost of production = cost-push inflation. But lower AD = lower prices. Wouldn't that lead to lower inflation?
  
  Thanks!

• 
  
  Answer should be B. Decentralisation of of the wage determination system will promote productivity as it gives employees more incentive to work productively, higher productivity will reduce inflationary pressures (as firms can make more overall profit margins, no need to push costs onto consumers). A decrease in minimum wage lowers production costs, which will ease cost-push inflation.
  
  - Imported inflation is when consumers are unable to access imports efficiently, which can be attributed to not only a depreciation but also a general increase in the price of the imported goods
  - Lower AD will ease demand-pull inflation and yes, lead to lower inflation. Lower AD doesn't necessarily lead to lower prices.

 

[YouCantMakeMe]

Answer should be B. Decentralisation of of the wage determination system will promote productivity as it gives employees more incentive to work productively, higher productivity will reduce inflationary pressures (as firms can make more overall profit margins, no need to push costs onto consumers). A decrease in minimum wage lowers production costs, which will ease cost-push inflation.

- Imported inflation is when consumers are unable to access imports efficiently, which can be attributed to not only a depreciation but also a general increase in the price of the imported goods
- Lower AD will ease demand-pull inflation and yes, lead to lower inflation. Lower AD doesn't necessarily lead to lower prices.

Why is this so? Thanks,btw

 

[atargainz]

Why is this so? Thanks,btw

Actually, my bad lower AD does lead to lower prices, lower AD --> less consumption --> lower prices. The answer is still B though because it lends itself to demand-pull inflation

 

[ThomasMcCorquodale]

7.) What is the equilibrium level of income if C=100+0.8Y and I= 40 million? completely lost on this one

The equilibrium level of income (Y) is where C+I=Y. If we substitute the values for consumption (C) and investment (I) into this equation, we can solve it and calculate the equilibrium level of income.

(C)+(I)=(Y)
(100+0.8Y)+(40)=(Y)
(100)+(40)=(Y)-(0.8Y)
140=0.2Y
Y=140/0.2
Y=700million

 

[dathat]

6.) Which scenario best demonstrates the benefits of a fixed exchange rate?

• A.) A country experiencing a recession fixes is currency to that of a country in which interest rates are high.
  B.) A country experiencing a boom fixes its currency to that of a country experiencing a recession
  C.) A country experiencing a recession fixes its exhange rate above the equilibrium rate
  D.) A country experiencing a boom fixes its exchange rate below the equilibrium rate.

confused af about this one as well...someone pls explain

 

[milkman007]

6.) Which scenario best demonstrates the benefits of a fixed exchange rate?

• A.) A country experiencing a recession fixes is currency to that of a country in which interest rates are high.
  B.) A country experiencing a boom fixes its currency to that of a country experiencing a recession
  C.) A country experiencing a recession fixes its exhange rate above the equilibrium rate
  D.) A country experiencing a boom fixes its exchange rate below the equilibrium rate.

Assuming this is a MC question from 2010 HSC, A) should be: A country experiencing a recession fixes its currency to that of a country in which interest rates are low.

 

[milkman007]

A) would be more appropriate as during a recession a country would benefit from having a lower exchange rate. This would increase the country's international competitiveness, stimulating aggregate demand (X) and economic growth through exports.

 

[sy37]

A) would be more appropriate as during a recession a country would benefit from having a lower exchange rate. This would increase the country's international competitiveness, stimulating aggregate demand (X) and economic growth through exports.

A,D were accepted in this question

But I believe D is more appropriate, anyone else ?

 

[turnerloos]

A,D were accepted in this question

But I believe D is more appropriate, anyone else ?

both correct according to BOS, but i would've went with A.. D sounds autistic.. or maybe you just want the D?

 

[sy37]

both correct according to BOS, but i would've went with A.. D sounds autistic.. or maybe you just want the D?

ah....yes

totally - no fooling you

I'm picking the obviously wrong answer because I want penis

 

[Ekman]

Both A and D are appropriate answers, and that is why BOS accepted both.