Section I - Multiple Choice (4 Viewers)

[ajay12]

But Labour force got smaller. Unemployment rate is unemployed/labour force

hence unemployment rate increased

im probably wrong as no one seems to support me

People lose job, not actively seeking work; this is hidden unemployment and is not included in the unemployment rate.

Thus, Labourforce and Unemployment rate lessens.

 

[Kakashi Hatake]

^no unemployment rate wouldn't lessen because they weren't unemployed beforehand, they were employed so they are part of the labour force, but when they are retrenched and DON'T ACTIVELY SEEK a job then they are not part of unemployed.

 

[La Bomba]

ajay is correct.

 

[Kakashi Hatake]

edit: kk nvm... i got it

so what is the answer to 18?

 

[ajay12]

edit: kk nvm... i got it

so what is the answer to 18?

Haha, don't worry mate. It also took me a while to get my head around the answer. That's the thing I love/hate about Economics, it's the only topic that I believe, makes you stop and think of the correct answer and weigh up possibilities.

 

[bell531]

For those people interested in the multiplier question, it was something like this:

Y ------ C
400 | 150
500 | 200
600 | 250
??? | 350

Each year the level of consumption rose by 50, and the level of national income rose by 100. Then in the last year, when C rose by 100, you get the answer of Y = 800, since it rose 200 in the last year. Im not sure if I got the C values correct, but im pretty sure the Y values are.

 

[DMT92]

yehhh thats ok man. yeh lots of ppl wil get that question wrong.

MATE!!!!!! U got question 12 wrong. the formula is BASE over CURRENT CPI to work out real gdp. Stop trying to convince yourself that you are correct. YOU ARE WRONG! ACCEPT IT! My father is an economist and says the answer is C. get ova it and stop posting your rebukes. WRONG!!!

 

[bell531]

MATE!!!!!! U got question 12 wrong. the formula is BASE over CURRENT CPI to work out real gdp. Stop trying to convince yourself that you are correct. YOU ARE WRONG! ACCEPT IT! My father is an economist and says the answer is C. get ova it and stop posting your rebukes. WRONG!!!

Executed with grace, and dignity.

Also, this is how I did that real GDP question, Q12:

GDP -- CPI
6000 - 130
6800 - 150

So 6000 x (150/130) [so as to get it to the 150 level of CPI] equals 6923.xx, and since thats greater than 6800, then 6800 represents a lower real GDP in Year 2.

Does this sound right?

 

[JAM91]

ok iv done with my exams got nothing better to do so ill give u right answers and explain the more difficult ones

1. A
2. B
3. C
4. B (buying government securities increases cash in the economy and thus lowers interest rates- pretty easy but hard to get mixed up)
5. A
6. D (difficult but hard to explain)
7.C
8. A (780-550=equity so 230/1120)
9. A
10. D (because if you look at the graph you'll see that the amount that we produce can increase because of the increase in price increasing our production and decreasing our imports)
11. D (because it is more expensive for others to invest in Australia and our exports are more expensive which will reduce our international competitiveness)
12. C
13. D
14. A (deregulating labour markets is a microeconomic reform aimed at increasing supply)
15. D (this is by process of elimination, A is wrong because it doesnt effect domestic banks. B is wrong because it will increase the amount of cash in the australian economy. C is wrong because its government debt which doesnt appear on the CAD. Therefore D is the only correct answer.)
16. B ( i know the multiplyer increases which means equilibrium income increases)
17. A (because if Australians demand extra overseas assets it raises the supply of the $A)
18. D
19. B
20. A (this is also by process of elimination. B is wrong because thats a centralised system. C is wrong because that is also a centralised system because government has nothing to do with decentralised system negotiating. D is wrong because that is talking about awards.)

cheers

 

[AnandDNA]

ok iv done with my exams got nothing better to do so ill give u right answers and explain the more difficult ones

1. A
2. B
3. C
4. B (buying government securities increases cash in the economy and thus lowers interest rates- pretty easy but hard to get mixed up)
5. A
6. D (difficult but hard to explain)
7.C
8. A (780-550=equity so 230/1120)
9. A
10. D (because if you look at the graph you'll see that the amount that we produce can increase because of the increase in price increasing our production and decreasing our imports)
11. D (because it is more expensive for others to invest in Australia and our exports are more expensive which will reduce our international competitiveness)
12. C
13. D
14. A (deregulating labour markets is a microeconomic reform aimed at increasing supply)
15. D (this is by process of elimination, A is wrong because it doesnt effect domestic banks. B is wrong because it will increase the amount of cash in the australian economy. C is wrong because its government debt which doesnt appear on the CAD. Therefore D is the only correct answer.)
16. B ( i know the multiplyer increases which means equilibrium income increases)
17. A (because if Australians demand extra overseas assets it raises the supply of the $A)
18. D
19. B
20. A (this is also by process of elimination. B is wrong because thats a centralised system. C is wrong because that is also a centralised system because government has nothing to do with decentralised system negotiating. D is wrong because that is talking about awards.)

cheers

why cant 15 be C

Cuase if government borrows from overseas then dont they pay interest which comes from net income component of CAD

 

[JAM91]

I'm 99% sure its a trick one of the fundamental things i got taught was to not fall for government borrowing adding to the CAD because it is completely separate. May be something different though.

 

[daniel81]

why cant 15 be C

Cuase if government borrows from overseas then dont they pay interest which comes from net income component of CAD

Yeah I would agree here and say it's C. The only way D could be true is if repayments had to be made (but in the foreign currencies) so $A had to be sold and the foreign currency bought. But the amount of depreciation from that would be so small as to be insignificant.

 

[JAM91]

Yeah i may have got that one wrong. Pretty sure all the rest are right. I was struggling to think of how it would depreciate the $A but i was certain that government debt had nothing to do with the CAD. Still pretty sure it doesn't, because the net income section involves the repayment of Australia's $633 bn foreign debt, and government debt is completely separate (It comes only from government borrowing). Anyway we'll see.

 

[La Bomba]

MATE!!!!!! U got question 12 wrong. the formula is BASE over CURRENT CPI to work out real gdp. Stop trying to convince yourself that you are correct. YOU ARE WRONG! ACCEPT IT! My father is an economist and says the answer is C. get ova it and stop posting your rebukes. WRONG!!!

OMG THE BASE YEAR IS 130!!!!!! 6000 divided by 130which is base year) x 100 = $4615
Now for the 2nd one, it = 6800 x 130/150=5893 . usually when the human development index rise 0.15 there is not a decline in gdp, standards of living wuld be higher, people wuld be earning higher incomes etc, less unemployment. damnnn MATEEEEEEEEEE! geeez how many fucken times do i hav to explain shit to ppl who wont admit there wrong.

 

[La Bomba]

and if u did the base year which is 130 over current cpi, you wuld of f***n realised its A!

 

[ajay12]

2006, Q3 has a very similar question on Real GDP. Can someone please look it up to stop this bickering. The answer to the 2006 question is B, so I think that means the answer for today is that it decreases.

If you want something done, do it yourself.

MATE!!!!!! U got question 12 wrong. the formula is BASE over CURRENT CPI to work out real gdp. Stop trying to convince yourself that you are correct. YOU ARE WRONG! ACCEPT IT! My father is an economist and says the answer is C. get ova it and stop posting your rebukes. WRONG!!!

No, your father isn't an economist. Idiot.

I'm 99% sure its a trick one of the fundamental things i got taught was to not fall for government borrowing adding to the CAD because it is completely separate. May be something different though.

I got C.

 

[La Bomba]

I also got C for 15. Isnt that what contributed to our major current account deficit right now rudd borrowing to finance his fiscal stimulus?

 

[cu46_Keith]

I can't believe how long this discussion about the GDP question has gone, La Bomba is defo right. I won't bother restating the formula that proves this as he has already done so a number of times, however consider, everyone agrees that living standards have increased the dispute is over whether real GDP has increased, but do you really think real GDP would have decreased if living standards went up..... I didn't think so. It is common knowlodge, even if you disregard the maths, that if living standards increase it needs to be accompanied by an increase in real GDP so the investment, improved services etc that undepins living stan increase, can be achieved.

 

[La Bomba]

glad you agree keith, as yu said it's common knowledge.

 

[cu46_Keith]

you seem like a fairly smart guy, what did you think of the test overall, I think it was hard than people realise, in part because the markers have v. high standards, what sort of raw mark are you expecting