Economics and International Trade HC1072

Economics and International Trade HC1072

Question 1                                                                                                    (7 marks)

Part A.  Analyse each situation and answer the blanks based on the economic classification of good and services. (1 mark each)

1. Research shows that in countries where incomes are high and continue to exhibit an increasing trend, couples decide to have less children. Children are regarded as a/an _______________ good.
2. A beer business in NSW sources glass bottles from a supplier in Victoria as well as tin bottlecaps from a company in Western Australia to package and ship its final product. For the beer business, glass bottles and tin bottlecaps are _______________ goods.
3. A marathoner crossed the finished line after 5 hours of running. His support team had a can of Red Bull energy drink, a bottle of vitatmin enriched water, a jug of orange juice and a bottle of red wine on hand and the runner can make his own choice. For the thirsty runner — the sports drink, water, juice and wine — are ______________ goods.
4. Mary received a job promotion. With her salary increase, Mary decides to buy a new car despite having a perfectly usable car bought just 8 months ago.  Cars in this scenario can be considered a/an _______________ good.

 

Part B.  Classify whether the 4 situations above fall under microeconomics or macroeconomics (1 mark). Justify your answer (2 marks).

Question 2                                                                                                    (11 marks)

Discuss the workings of tight monetary policy.  What is/are the possible objective/s of a tight monetary policy? (3 marks)  What are the tools used to control the policy? (3 marks)  When will it be necessary to impose tight monetary policy in an economy? (3 marks)  Who is responsible for overseeing monetary policy in Australia? (2 marks)

Question 3                                                                                                    (11 marks)

1. Compare and contrast GDP versus GNP. (3 marks) Provide an example of each. (3 marks)
2. Based on the data provided, calculate GDP according to the Expenditure Model. (5marks)

Savings                                                                                  $642

Incoming FX Receipts                                                       $896

Private investment                                                              $414

Imports                                                                                  $624

GST Collected                                                                       $168

Personal consumption                                                        $765

Rent Income                                                                         $698

Property Taxes Collected                                                   $267

Exports                                                                                  $578

Government spending                                                       $1203

Question 4                                                                                                    (7 marks)

Discuss Expansionary Fiscal Policy. Who is responsible for implementing fiscal policy? (2 marks) What may be adjusted to implement the policy? (2 marks) According to studies, fiscal policy can be slow to react to economic situations.  Identify and discuss one reason why this may occur. (3 marks)

Question 5                                                                                                    (7 marks)

With footware sales of USD 28 Billion in the fiscal year ended 31 May 2021, Nike is still  No. 1 in the sneakers market.  Identify the market structure where Nike operates. (2 marks) Discuss at least 2 features of that market structure (5 marks).

Question 6                                                                                                    (7 marks)

Choose a product/service. Describe the elasticity of supply for your product/service (2 marks).  Identify one factor that influences the elasticity of supply for that product/service (2 marks).  Discuss the what happens to elasticity of supply if you vary that factor (3 marks). APA FORMAT