Sections III, IV - Extended Response (1 Viewer)

[Lis020393]

I did fiscal and exchange rates but for fiscal I talked about automatic stabilisers, changes in revenue/expenditure and it's impacts and linked external stability and inflation in it somehow (I forget how, the essay was a bit messy) and also talked about the necessity of a macroeconomic mix to effectively manage the issues of economic activity and income distribution then talked about the limitations of fiscal policy. Didn't go into detail about the impact of expansionary/contractionary/balanced budget though
For exchange rates I somehow talked about both the effects of changes in domestic and global economy on exchange rates and the negative and positive impacts of an appreciation/depreciation of exchange rates.
I don't know, I think my essay structures were all over the place which is probably only gonna get me a 15-16 outta 20

 

[cloudstr1f3r]

Did 26 and 28 gahhhh

 

[Titangod77]

So I am the only one in state who found the essay hard.. And out of time

Well I screwed up big time I think (no chance of band 6 now)

One more thing for exchange rates essay, your ment to talk about how domestic and global economy effect exchange rates not how exchanges rates impact

Good luck everyone

 

[determine]

So I am the only one in state who found the essay hard.. And out of time

Well I screwed up big time I think (no chance of band 6 now)

One more thing for exchange rates essay, your ment to talk about how domestic and global economy effect exchange rates not how exchanges rates impact

Good luck everyone

correct.

 

[myafanatic]

Okay guys, here's what I wrote about in my essays - can you tell me if I was on the right track/what I should be looking at? I had a massive migraine and almost threw up during the exam so I'm concerned that I just didn't write appropriate things, especially for the second essay. I'm just super concerned I won't get a band 6 :/

Question 25
Fiscal Policy
9 pages (8-9 words a line)
- goal to target aggregate demand, good during emergency shocks to raise economic activity, comparison to MEP and MP, discretionary changes for economic activity and non-discretionary automatic stabilisers for income distribution
- context paragraph about the role of FP in recent years, how it played a significant role in the GFC and has moved back to fiscal consolidation
- two/three paragraphs about the effectiveness of the GFC stimulus in targeting consumption through government spending, related to AD equation/circular flow (good use of stats here for the stimulus)
- a paragraph about how it targets long-term economic activity (defined as growth) directly and indirectly through improving resource allocation (example of changes to subsidies and tariffs as spending and tax to specialise in comparative advantage)
- two paragraphs about how it is the main policy option for targeting income distribution through the automatic stabilisers, used Gini coefficient stats and just generally stated that they work to simultaneously moderate aggregate demand (i.e. economic activity) and achieve better distribution of income
- concluding statement about the effectiveness of fiscal policy in achieving those objectives

Question 27
Microeconomic Policy
7 pages (8-9 words a line)
- aim of MER to increase aggregate supply, achieving long-term growth through productivity gains in both product and factor markets
- context paragraph about the history of MER, 2.5% pa productivity growth in the 1990s, now plays a lessened role in comparison
- trade liberalisation and its impact on Australia achieving its comparative advantage of resources ("allocative efficiency"), higher international competitiveness overall and reduced inflation
- financial deregulation as a factor market, allows increased access to finance etc through the floating of the dollar, removal of foreign ownership restrictions which again contributes to a low-inflation, competitive environment and greater technical efficiency
- labour market decentralisation in terms of a factor market - significant productivity gains, tying productivity increases to wage increases to incentivise working harder, talked about enterprise bargaining and stuff, as well as the flexible working hours increasing underemployment during the GFC but maintaining a low unemployment rate
- national competition policy (product market) to encourage competition to ensure consumers have access to a wider range of goods and to mitigate inflation
- concluding statement about the COAG reform agenda to achieve a "seamless national economy" and the necessity of further MER in the future to achieve a long-term expansion in growth

 

[manscux]

hey gys,, did anybody do the fiscal question. So many people have done monetary

anyway.....

could determine or anybody else check this scaffold


Stabilising fluctuations in the business cycle offers an optimistic and stable economic environment conducive to sound investment decisions by business and to encourage workers to invest in upgrading their skills to take advantage of new employment opportunities. However the depth, diversity and ever-changing nature of the economy means that governments may need to use its counter cyclical or macroeconomic policies to reduce or raise aggregate demand (AD).
• Currently economic growth has been
• For this reason, both Julia Gillard and Wayne Swan want to bring the budget to a surplus → increasing T and reducing G
• To supplement the governments objective of a rather contractionary stance, Glen Stevenson’s has promised to pursue non-inflationary economic growth through a rather neutral monetary policy stance


Fiscal policy is the heart of the management of the economy, often thought of as the most successful at stimulating AD because of its rather small time lag
Define:
exercised through budget
Current trends:
• The move from a $21.7 billion budget surplus in 2008-09 to a $57.6 billion budget deficit in 2009-10 as suggested by stimulus
• G >T, especially after the GFC. 17 years of strong growth and budget surplus especially fuelled by strong taxation from commodities

Fiscal policy commonly exercised through the budget.
• Discretionary (structural component)
• Non-discretionary (cyclical component) → through automatic stabilisers

ECONOMIC GROWTH
can use government expenditure to increase AD via the multiplie if it wants expansionary stance
define expansionary stance Rationale for this through Keneysia deflatioanry gaps
RATIONALE DIAGRAM
explain diagram and how government stiulates demand
Expansionary stance can also be achieved by redcing taxation

do the same thing if government wants a contractionary stance
define contractionary
Rationale for this through infaltionary gaps
diagram
explain

REAL WORLD EXAMPLE OF HOW government did this during gfc

Fiscal policy was very effective during GFC, for that reason treasurer got internationally recognised award
• Many people argue fiscal policy was temporary, targeted and timely, consisting of a series of one-off cash handouts, shovel-ready minor capital woks and infrastructure projects --. All discretionary policy
• Discretionary policy → targeted BER which helped construction industry
• Increased employment growth which hires ¼ workers
• Had a multiplier effect in every neighbourhood
• Tended to see less people out of work. U/E while rose to 5.2% wasn’t significant compared to other OECD countries (USA 9.6%)
• Non-discretionary policy via stabilisers → STATS

Currently with GFC over, government tends to move away reform deficit and into surplus by 2012/13. Fiscal consolidation. G < T.
• Despite current domestic and global problems, export revenue has risen and investment demand has also seen increases. G can be eased as greater exports will generate taxation for governments

This could effect income equality
As a fiscal surplus would mean that G is reducing while taxation is increasing.
Show how sometimes policy may conflict as most of the decrease in government expenditure is public services

income inequality
could effect by raising/reducing government expenditure
what happens when they reduce
what happens when they increase

Can also do this through taxation
currently have progressive taxation, but some policies have tended to make tax regressive
what hapends when they reduce taxtion --> through threshold
what happends when they increase taxation --> GST or increase in top marginal rates

In current budget:
Governemnt expenditure--> in an attempt to bring fiscal suplus reducing G i..e youth allowance decreasing, social security decreasing
threshold is increasing but top marginal rates also increasing thus retrenching inequality
GST also tend to make the taxation system more regressive


cONCLUSION: with atempts to consolidate budget the governemtn must ensure it does not increase inequality.
Also with a ore contractionary stance, the role of discretioanry policy will start to reduce


very detailed.... so what marks would i get

p.s i wrote 8 pages

 

[manscux]

i did fiscal to......


it sounds good, especially real world but did you explain using theoretical reasoning

i mean what using keneysian deflationary and inflationary gaps ???

 

[determine]

Okay guys, here's what I wrote about in my essays - can you tell me if I was on the right track/what I should be looking at? I had a massive migraine and almost threw up during the exam so I'm concerned that I just didn't write appropriate things, especially for the second essay. I'm just super concerned I won't get a band 6 :/

Question 25
Fiscal Policy
9 pages (8-9 words a line)
- goal to target aggregate demand, good during emergency shocks to raise economic activity, comparison to MEP and MP, discretionary changes for economic activity and non-discretionary automatic stabilisers for income distribution
- context paragraph about the role of FP in recent years, how it played a significant role in the GFC and has moved back to fiscal consolidation
- two/three paragraphs about the effectiveness of the GFC stimulus in targeting consumption through government spending, related to AD equation/circular flow (good use of stats here for the stimulus)
- a paragraph about how it targets long-term economic activity (defined as growth) directly and indirectly through improving resource allocation (example of changes to subsidies and tariffs as spending and tax to specialise in comparative advantage)
- two paragraphs about how it is the main policy option for targeting income distribution through the automatic stabilisers, used Gini coefficient stats and just generally stated that they work to simultaneously moderate aggregate demand (i.e. economic activity) and achieve better distribution of income
- concluding statement about the effectiveness of fiscal policy in achieving those objectives

Question 27
Microeconomic Policy
7 pages (8-9 words a line)
- aim of MER to increase aggregate supply, achieving long-term growth through productivity gains in both product and factor markets
- context paragraph about the history of MER, 2.5% pa productivity growth in the 1990s, now plays a lessened role in comparison
- trade liberalisation and its impact on Australia achieving its comparative advantage of resources ("allocative efficiency"), higher international competitiveness overall and reduced inflation
- financial deregulation as a factor market, allows increased access to finance etc through the floating of the dollar, removal of foreign ownership restrictions which again contributes to a low-inflation, competitive environment and greater technical efficiency
- labour market decentralisation in terms of a factor market - significant productivity gains, tying productivity increases to wage increases to incentivise working harder, talked about enterprise bargaining and stuff, as well as the flexible working hours increasing underemployment during the GFC but maintaining a low unemployment rate
- national competition policy (product market) to encourage competition to ensure consumers have access to a wider range of goods and to mitigate inflation
- concluding statement about the COAG reform agenda to achieve a "seamless national economy" and the necessity of further MER in the future to achieve a long-term expansion in growth

sounding good! if you expanded on that stuff, you should do fine! don't stress.

 

[kev-is-red]

My fiscal essay was rubbish now that I think back. I'll be happy with a 15/20 to say the very least.

 

[juliastegner]

why? What went wrong? When I look back I guess I screwed up the beginning of my fiscal essay because I was reading the monetary policy question and ended up mistaking the fiscal policy question for 'unemployment(which was what the monetary policy question targeted) and income and distribution' T_T;;;;;;;;;;;; unfortunately I realized my mistake 3/4 of the way and tried to correct myself T_T;

 

[kev-is-red]

why? What went wrong? When I look back I guess I screwed up the beginning of my fiscal essay because I was reading the monetary policy question and ended up mistaking the fiscal policy question for 'unemployment(which was what the monetary policy question targeted) and income and distribution' T_T;;;;;;;;;;;; unfortunately I realized my mistake 3/4 of the way and tried to correct myself T_T;

I only studied for 3 essay responses. Micro, exchange rates and China.

 

[Skriker]

So I am the only one in state who found the essay hard.. And out of time

Well I screwed up big time I think (no chance of band 6 now)

One more thing for exchange rates essay, your ment to talk about how domestic and global economy effect exchange rates not how exchanges rates impact

Good luck everyone

well you can talk about the impact of the exchange rate and say something like how like with reduced international competitiveness on exports in the Aus economy is because of an appreciation as the other economies have too pay more for the higher value of the Aus dollar, so really you can talk about how exchange rates impact on the economy.

 

[Mjontrix]

So screwed man. Interpreted the exchange rate question the other way around-> impact of appreciation/depreciation of AUD on economy. BLOOODY HELLL!

 

[Skriker]

So screwed man. Interpreted the exchange rate question the other way around-> impact of appreciation/depreciation of AUD on economy. BLOOODY HELLL!

you should be fine mate, they may just capp you because it pretty much relates to the question if you get what i mean

 

[Mjontrix]

you should be fine mate, they may just capp you because it pretty much relates to the question if you get what i mean

Yeah man. Lets just hope that the markers are lenient and give me a decent mark haha
How'd you go?

 

[Skriker]

Yeah man. Lets just hope that the markers are lenient and give me a decent mark haha
How'd you go?

yeah man, not too bad just hope I haven't screwed anything up haha :O

 

[Urgh]

i'm not sure if mine will be terrible or not... i seem to have misinterpreted it as i just wrote the theory behind what domestically and internationally affects exchange rates, instead of what actually is doing it now, and has done it recently like GFC and stuff.