ETAWA 2021
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D
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D
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C
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B
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A x C
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A
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A x D
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C x B
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D x C
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C
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D
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A
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C x B
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A
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D
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B
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B x C
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A
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C x A
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B x C
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A x D
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B x A
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a. (inserts graph) b. Equilibrium price is 225, 20 units are demanded while 80 units are supplied. Thus, a surplus is created, which has an downwards effect on price. Thus, consumers demand less, while firms notice this, and produce less, and raise prices. Thus, quantity demanded will increase, while quantity supplied decreases, and this continues until the surplus is eliminated. Thus, price decreases, and the change in quantity is unknown. d. An increase in demand means a right shift of the demand curve. In order for the price to fall, the supply of jeans must increase by a greater amount (e.g. due to a non-price factor such as technological advancements) than the increase in demand.
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a. Leading: Consumer confidence, Co-incident: Retail sales, Lagging: unemployment b. Australia is likely experiencing a contraction. The article has stated that retail sales have decreased, and that consumer confidence has decreased. This is possibly due to the impact of lockdowns, as the article states, “lockdowns likely to drive GDP down”. c. Interest rates will affect the investment expenditure, and consumer expenditure. Lower interest rates will encourage consumer expenditure, as interest payments are smaller, and encourage spending. Higher interest rates also increase investment expenditure, as borrowed funds are required for capital. Thus, when rates rise, the repayments for capital purchased using borrowed funds increases, along with the opportunity cost of using funds to pay for borrowing costs. Consumer expectations will have a significant impact on expenditure. Negative expectations about income and price changes will reduce spending, and vice versa for positive expectations. Business expectations will depend on profit levels and sales inquiries. Positive expectations will increase investment and negative expectations will decrease spending on capital, as it will not be used to create final goods/services
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a. 24.8 billion dollars, 2019, Strong commodity prices b. 2 goods are iron ore and coal. 2 services are education and tourism. c. Australia’s main export partner is
WATP 2017
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B
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D
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A
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D
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D
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C
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B
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B
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- 14%
- Economic growth is defined as the increasing capacity of an economy to satisfy the material wants of its population. One factor that influences economic growth is technological advancements. An advancement in technology leads an increase in potential output, which increases economic growth. Another factor is the discovery of new raw materials. This increases potential output, which increases growth. One final factor is the labour force. If the size of the labour force increases, potential output increases, which increases growth. The same is true for the inverse.
- One benefit of economic growth is that it leads to a higher national income. Thus, GDP per capita increases, provided population is stable. Furthermore, growth is likely to stimulate demand for labour, and it is likely that more people will be employed and less people are unemployed. One final benefit is that more public and merit goods are produced. A growing economy means that the public sector can receive more tax revenue and more resources can be allocated to public and merit goods. This produces positive externalities. One cost of growth is that as growth increases, consumption and production increase, which could produce negative externalities. Another cost is that the income gap is widened. This is because some people may benefit more from growth than others. Finally, too rapid a rate of growth leads to inflationary pressure, and a balance of payments deficit, as imports rise to satisfy a growing household sector
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- e
- 5 billion, 2 billion, -9 billion, surplus
- The current account
- e