multiple choice (1 Viewer)

[darshil]

Hi there,
I just dont get this question. It must be simple but I see some of the others as a cost of inflation too. For example a depreciating currency will add to imported inflation.

Thanks for all the input
really appreciated!

 

[random-1005]

Hi there,
I just dont get this question. It must be simple but I see some of the others as a cost of inflation too. For example a depreciating currency will add to imported inflation.

Thanks for all the input
really appreciated!

A represents demand pull,

and B and C will cause a decrease in inflation


B, explicitly states an increase in productivity

in C, our exchange rate improves, we can by more goods from overseas for same amount $ (decreasing imported inflation)


and then you have A and D, one is demand pull, the other cost push


i love eco multichoice, so easy, just do them by process of elimination, you can almost instantly knock two answers out, then choose between the two remaining.

 

[muffins16]

A represents demand pull,

and B and C will cause a decrease in inflation


B, explicitly states an increase in productivity

in C, our exchange rate improves, we can by more goods from overseas for same amount $ (decreasing imported inflation)


and then you have A and D, one is demand pull, the other cost push


i love eco multichoice, so easy, just do them by process of elimination, you can almost instantly knock two answers out, then choose between the two remaining.

The question is NOT "Cost -push inflation" it is asking for "the cost of inflation" D is right but your reasoning is not

Cheers

 

[random-1005]

The question is NOT "Cost -push inflation" it is asking for "the cost of inflation" D is right but your reasoning is not

Cheers

pretty shitty trick question, i still would have got it right if it said "cost inflation"

 

[Zak Ambrose]

i hate economics MCQ. some are so hard. i always lose 2-3 marks in it.
i find it so easy to make silly silly simple mistakes in mcq.

 

[FFC]

The question is NOT "Cost -push inflation" it is asking for "the cost of inflation" D is right but your reasoning is not

Cheers

Yah, A is out as the high inflation will drive off demand.

B is out as productivity will fall (as wages will rise without a subsequent rise in production).

This gives the answer of D, even without checking C, however this can also be eliminated as a higher inflation rate means our goods are less competitive against foreign goods. As prices of our goods rise, demand for X and thus demand for the AUD falls causing a depreciation, and also imported goods will be in higher demand (as more competitive now), thus increasing the supply of AUD, again depreciating it. As such, C is out, and the answer is D.

 

[gnrlies]

Don't worry too much about these kinds of questions. I can categorically say that HSC questions will not be confusing (although they may be difficult, if you know your theory you are assured to get the right answer)

 

[darshil]

thanks everyone, cleared it all up