ECONOMICS HSC EC HEAD START LECTURE 2019 Presented by: Isaac Dela - - PowerPoint PPT Presentation

HEAD START LECTURE 2019

EC ECONOMICS HSC

Presented by: Isaac Dela Torre

Introduction

Today’s Agenda

Economic Skills Globalisation Protection Development Case Study

HOW TO SMASH HSC ECONOMICS!!

Study Skills Globalisation Protection Development Case Study

Housekeeping Rules

Ask Questions Answer Questions Be Respectful Let me know if I’m too fast Phones on silent

Study Skills Globalisation Protection Development Case Study

Skills: Preparing for the Exam

• Be present
• Engage with

the material

• Ask Questions
• Find your

study habits

• Understand >

memorise

• Keep up to

date

• Exam

technique

• Leveraging

Adrenaline

• Game Plan

Study Skills Globalisation Protection Development Case Study

Syllabus Overview

The Global Economy Australia’s Place in the Global Economy Economic Issues Economic Management

Study Skills Globalisation Protection Development Case Study

Syllabus Overview

The Global Economy Australia’s Place in the Global Economy Economic Issues Economic Management

Study Skills Globalisation Protection Development Case Study

Syllabus Overview

The Global Economy Australia’s Place in the Global Economy Economic Issues Economic Management

Study Skills Globalisation Protection Development Case Study

Exam Overview

Multiple Choice

• 20 Marks
• Drawn from all four topics

Short Answer

• 40 Marks
• Drawn from all four topics

Stimulus Essay

• 20 Marks
• Focuses on one to two topics

Extended Response

• 20 Marks
• Focuses on one to two topics

Study Skills Globalisation Protection Development Case Study

Exam Overview

Multiple Choice

• 20 Marks
• Drawn from all four topics

Short Answer

• 40 Marks
• Drawn from all four topics

Stimulus Essay

• 20 Marks
• Focuses on one to two topics

Extended Response

• 20 Marks
• Focuses on one to two topics

Key Tips:

Attempt all four sections (you have a choice of essay question in 3 and 4) Need knowledge across the whole topic and how the topics interrelate Understand economic trends Know what order you will do the exam in

Study Skills Globalisation Protection Development Case Study

Multiple Choice:

Read question carefully Underline/highlight/draw Cross out incorrect ‘part’ Read every answer

A D C B

Study Skills Globalisation Protection Development Case Study

Multiple Choice

• Example: The law of demand states

(a) That as the price of a good decreases, the quantity demanded will decrease (b) That as the price of a good increases, the quantity demanded will increase (c) That as the price of a good increases, the quantity demanded will decrease (d) That as the price of a good increases, the quantity supplied will increase

Study Skills Globalisation Protection Development Case Study

Multiple Choice

• Example: The law of demand states

(a) That as the price of a good decreases, the quantity demanded will decrease (b) That as the price of a good increases, the quantity demanded will increase (c) That as the price of a good increases, the quantity demanded will decrease (d) That as the price of a good increases, the quantity supplied will increase

X X X

Study Skills Globalisation Protection Development Case Study

Short Answer

• Look at the mark value and the lines provided to gauge what level of

detail

• They have accounted for people who have large writing
• Break down the question
• Highlight the directive verb and the content the question asks
• Try to plan an answer in your head before writing
• saves having to scribble out

Study Skills Globalisation Protection Development Case Study

Short Answer

• 1. Signpost your answer – use numbers
• 2. Write a one/two word answer and underline
• When a marker marks, they look for the key words to make sure you

understand and are answering the question – put the front and centre

• 3. Explain the answer making sure to relate it to the question and

adequately explain/define terms

Study Skills Globalisation Protection Development Case Study

Short Answer

Explain two reasons why economies experience different levels of development (6 marks), HSC 2014

Study Skills Globalisation Protection Development Case Study

Short Answer

Explain two reasons why economies experience different levels of development (6 marks), HSC 2014

• 1. Natural resource endowment

Economies with larger quantities of resources use these resources to generate export income, which can be used to fund education and health unlike those with limited natural resources who are unable to generate income to fund this development.

• 2. Political and economic institutions.

Some economies are supported by well-developed institutions, which protect property and investments and minimise corruption. In contrast,

• ther economies have weak political institutions, which discourage the

private and public investment necessary to fund development.

Study Skills Globalisation Protection Development Case Study

Short Answer

Explain two reasons why economies experience different levels of development (6 marks), HSC 2014

• 1. Natural resource endowment

Economies with larger quantities of resources use these resources to generate export income, which can be used to fund education and health unlike those with limited natural resources who are unable to generate income to fund this development.

• 2. Political and economic institutions.

Some economies are supported by well-developed institutions, which protect property and investments and minimise corruption. In contrast,

• ther economies have weak political institutions, which discourage the

private and public investment necessary to fund development.

Numbered Heading Define terms Cause + effect Link to Question

Study Skills Globalisation Protection Development Case Study

Practice

Q: Explain why schools set homework (4 marks)

Study Skills Globalisation Protection Development Case Study

Economics Essay

Example Question: For an economy other than Australia, discuss and evaluate the strategies used to promote economic growth and development

Study Skills Globalisation Protection Development Case Study

Economics Essays: Planning

Choose Question

• Don’t waste

time deciding

• Go with your

gut Directive Verb

• Shapes what

your essay proves Highlight

• Key words
• Break down

the question Brain Dump

• Knowledge
• Concepts
• Graphs
• stats

For an economy other than Australia, discuss and evaluate the strategies used to promote economic growth and development : Discuss – provide points for an against Evaluate – provide a judgment based on criteria Strategies – this is asking us for policies the government put into place Economic growth and Development – it is important to know the difference between the two (they are defined in the essay) as well as the criteria for each so that you can properly evaluate if the strategies lead to Economic growth and development

Study Skills Globalisation Protection Development Case Study

Economics Essay

Introduction Trend Analysis Body Paragraphs Conclusion

Study Skills Globalisation Protection Development Case Study

Introduction

• Essays are marked impressionably – don’t piss off marker
• Usually this determines what band you’re in and the rest of your

essay dictates what mark

• 1. Definition of the key words in the question
• 2. Address the question and be your “thesis” for your essay which

basically outlines your argument and your stance

• 3. Outline what will be in your subsequent paragraphs
• 4. Finally, sum up your introduction by linking your paragraphs to your

thesis and the question.

Study Skills Globalisation Protection Development Case Study

Introduction Example

Economic growth is defined as an increase in the total value of goods and services produced by an economy over a period of time, whereas economic development is a qualitative measure of a countries wellbeing based on quality of life which is measured through the Human Development Index (HDI). The Chinese economy has undergone major structural reforms in order to promote economic growth and development by embracing globalisation. Economic growth and development have successfully been increased through strategies such as the Open-Door Policy, Agricultural Reforms and Special Economic

• Zones. These changes have seen increases in China’s GDP growth as

well as HDI and other development attributes. More over these policies benefits have not been shared equally as there a large extent of inequality within China.

Define Thesis Paragraph 1 Paragraph 3 Paragraph 2 Summation and Link

Study Skills Globalisation Protection Development Case Study

Trend Analysis

Include:

• direction
• a high point
• a low point
• an average
• current point

1 2 3 4 5 6 7 1 2 3 4 5 6

Trend Analysis

Exchange Rate Economic Growth Column1

Study Skills Globalisation Protection Development Case Study

Trend Analysis Example

Prior to Deng’s rule, China was a closed economy having growth rates less than 5% as well as increasing poverty and low development. After and during Deng’s reign, the policies aforementioned boosted aggregate demand and supply seeing an increase in GDP growth that averaged 11.9% for 3 decades and reached a high of 16% in 1995 and 14% in 2007, maintaining high growth until the GFC which unlike other economies slowed but did not go into negative at 7%. GDP growth is still high but has significantly slowed since then currently at 6.9% as at 10/8/16.

Study Skills Globalisation Protection Development Case Study

Trend Analysis Example

Prior to Deng’s rule, China was a closed economy having growth rates less than 5% as well as increasing poverty and low development. After and during Deng’s reign, the policies aforementioned boosted aggregate demand and supply seeing an increase in GDP growth that averaged 11.9% for 3 decades and reached a high of 16% in 1995 and 14% in 2007, maintaining high growth until the GFC which unlike other economies slowed but did not go into negative at 7%. GDP growth is still high but has significantly slowed since then currently at 6.9% as at 10/8/16.

Low point Average Direction High Current

Study Skills Globalisation Protection Development Case Study

Body Paragraph

• 1. Topic sentence outlining what you will be discussing.
• 2. Definition of whatever the concept in this paragraph is
• provide an explanation of what it is and how it works theoretically
• try to provide diagrams to show what you are talking about and explain the

concepts more clearly

• 3. The next few sentences vary, but they usually are along the lines of

showing the cause or effect/ or showing advantages and disadvantages.

• 4. Use an example from real life to prove what you are saying is true.
• 5. Repeat steps 3 and 4 for as many times as you need.
• 6. Linking sentence back to the question.

Study Skills Globalisation Protection Development Case Study

Body Paragraph Example

Special Economic Zones within China have promoted both economic growth. Through reforms to create special economic zones along coastal ports; Transnational Corporation investment was incentivised through tax cuts and the abundant labour supply (loose legislation). From increased investment through FDI flows, Aggregate Demand (C + I + G + X – M) was boosted as seen in figure 1 where an increase in Aggregate demand results in an increase of Output from Q to Q1.

Study Skills Globalisation Protection Development Case Study

Body Paragraph Example

This saw an increase in economic growth from 4% to approximately 7% in 1980s as investment contributed 40% within this time. Businesses in China increased production of mainly manufactured foods which increased Aggregate Supply in the economy as seen in figure 2 where an increase of Aggregate supply from AS to AS1 creates an increase in GDP from Q1 to Q2. This increase facilitated an increase in productive capacity and thus fostered economic growth. Thus, the special economic zone strategy has promoted both economic growth and development.

Study Skills Globalisation Protection Development Case Study

Conclusion

• 1. Your first sentence should be a restating of your thesis that directly

links back to the question.

• 2. Your second few sentences should be a really quick summary of

what you talked about in each of your paragraphs and how they relate to your argument as well as the question.

• 3. Lastly, you should sum up your argument again, taking into account

any counter arguments.

Study Skills Globalisation Protection Development Case Study

Conclusion Example

Ultimately, China’s strategies to open up the economy to global markets and increase efficiency have successfully facilitated economic growth and development. Policies including the Open-Door Policy, Special Economic Zones, Agricultural Reforms and Taxation Reforms have created higher growth levels and development levels than China has previously had; enabling the transition to an emerging economy soon to be advanced. Whilst many benefits have come to China’s popular, inequality has been created between Eastern and Western/Northern provinces, seeing a significant amount of China’s population still in extreme poverty; even so, overall strategies have been effective.

Study Skills Globalisation Protection Development Case Study

Overall Tips

• Make sure your essay is structured
• Find ways to signpost and draw markers

attention to key words, underline/highlight etc.

• Relate to the question all the time
• Include statistics given to you (not in a small

superficial way – use it to strengthen your argument)

• Length: around 7+ pages for enough detail

(850 words)

• Explain your diagrams – make sure to use Q1

Q2 etc not just chuck it in

Introduction Trend Analysis Body Paragraphs Conclusion

Study Skills Globalisation Protection Development Case Study

The Global Economy

Topic 1

Study Skills Globalisation Protection Development Case Study

Globalisation

Global Economy: All the countries in the world engaging in economic activity Economic integration: the liberalisation of trade barriers between two or more countries Globalisation: Integration between different countries and economies and the increased international influences on all aspects of life and economic activity

Study Skills Globalisation Protection Development Case Study

Indicators

Migration and International Division of Labour Communication, Technology and Transport Financial Flows Investment Flows Trade Flows

Study Skills Globalisation Protection Development Case Study

Indicators

Migration and International Division of Labour Communication, Technology and Transport Financial Flows Investment Flows Trade Flows

Remember these as ‘MCFIT’

Study Skills Globalisation Protection Development Case Study

Migration and International Division of Labour

Migration: movement of people between countries for long term

50000000 100000000 150000000 200000000 250000000 1990 2013

People Living Outside their Country

• f Origin

People Living Outside their Country of Origin

In 2013, 232m people lived outside compared to 154m in 1990 International division of labour: Tasks of production are allocated to different people in different countries of the world

Study Skills Globalisation Protection Development Case Study

Communication, Technology and Transport

ICT revolution à introduction of internet increases access Communication à decrease geographical barriers Enable other flows between countries Efficient transportation

Study Skills Globalisation Protection Development Case Study

Financial Flows

No measure of global financial flows

• Derivative activity: total derivatives fell in 2008 to

$482t and has increased to $630t in 2014

• Global Fx daily market turnover: $1,934b in 2004

to $5,345b in 2013

Money exchanged through forex markets Allows entry into

• ther economies

Easier to source finance from

• ther countries

Study Skills Globalisation Protection Development Case Study

Investment and Transnational Corporations

• Foreign Direct Investment - movement of funds to

buy a controlling interest (more than 10% of a company)

• $200b in 1982 - $1.23 trillion in 2014
• Portfolio Investment - short term movement of

funds to

• make profit àspeculative
• TNC – global companies that produce and deliver

products in many different countries

• Apple

Study Skills Globalisation Protection Development Case Study

Trade Flows

Measure of how goods and services are consumed in other countries = volume of world trade

• 15
• 10
• 5

5 10 15 2009 2012 2014 2015 Growth Average

Growth in world trade averaged 6.9% falling to -10.6% in 2009 before rising to 13.6% in 2012. In 2014, growth was 3.4% and 3.7% in 2015 World trade was $8.7 trillion in 1990 growing to $45 trillion in 2013 à 50x 1950 level

Study Skills Globalisation Protection Development Case Study

Indicators

Migration and International Division of Labour Communication, Technology and Transport Financial Flows Investment Flows Trade Flows

Study Skills Globalisation Protection Development Case Study

Indicators

Migration and International Division of Labour Communication, Technology and Transport Financial Flows Investment Flows Trade Flows

Drive Globalisation

Study Skills Globalisation Protection Development Case Study

International Business Cycle

Increased economic integration International Business Cycle

Study Skills Globalisation Protection Development Case Study

Practice

Study Skills Globalisation Protection Development Case Study

Topic 2

Protection

Study Skills Globalisation Protection Development Case Study

Free Trade

• Situation in which there are no artificial barriers to trade
• Countries specialise in their most efficient production
• Comparative advantage v absolute advantage

Study Skills Globalisation Protection Development Case Study

Advantage

• Comparative Advantage = Based on the opportunity cost of

production

• Opportunity cost = cost of the next best alternative use of resources forgone
• Absolute Advantage = country can produce more with given resources

Phones Laptops Australia 100 50 USA 60 20

Study Skills Globalisation Protection Development Case Study

Advantage

Australia has an absolute advantage in both phones and laptops

Phones Laptops Australia 100 50 USA 60 20 Opportunity Cost Phones Laptops Australia 0.5 2 USA 3 0.33

Australia has a comparative advantage in phone production and USA in laptops

Study Skills Globalisation Protection Development Case Study

Advantages of Free Trade

Increased GWP Increased Competition Greater Range of Output Employment Resource Efficiency

Study Skills Globalisation Protection Development Case Study

Disadvantages of Free Trade

Infant Industries Unable to Diversify Loss of industries Negative Externality Inequality Dumping

Study Skills Globalisation Protection Development Case Study

International Organisations

United Nations World Bank International Monetary Fund World Trade Organisation Organisation for Economic Co-ordination and Development

Study Skills Globalisation Protection Development Case Study

International Organisations

United Nations World Bank International Monetary Fund World Trade Organisation Organisation for Economic Co-ordination and Development

All promote Free Trade amongst nations

Study Skills Globalisation Protection Development Case Study

Free Trade Agreements

Formal agreement between countries designed to break down barriers to trade between those nations Give more favourable access to goods and services from different nations à creates freer trade for those countries

Study Skills Globalisation Protection Development Case Study

Free Trade Agreements

Formal agreement between countries designed to break down barriers to trade between those nations Give more favourable access to goods and services from different nations à creates freer trade for those countries

You must know two bilateral and two multilateral!

Study Skills Globalisation Protection Development Case Study

ChAFTA

• China Australia Free Trade Agreement
• Understand how it promotes globalisation
• Tariffs on Beef less than 25% to be eliminated
• In 2016, Australia exported around $74 billion worth
• f resources, energy and manufactured products to China
• 99.9 per cent of Australia's resources, energy and manufacturing exports will

enjoy duty-free entry into China.

• Trade Diversion and Inequality

Study Skills Globalisation Protection Development Case Study

Protection

Any artificial barrier to trade

Military Self Sufficiency Cheap Foreign Labour National Spending Preserve National Identify

Non-economic reasons for protection

Study Skills Globalisation Protection Development Case Study

Methods of Protection

Tariffs Subsidies Quotas Local Content Rules Export Incentives

Study Skills Globalisation Protection Development Case Study

Tariffs

Introduction

Practice

Study Skills Globalisation Protection Development Case Study

Subsidies

Introduction

Practice

Study Skills Globalisation Protection Development Case Study

Quotas

Study Skills Globalisation Protection Development Case Study

Local Content Rules

• Government policies and industry plans which specify a certain

minimum percentage of inputs or outputs must be manufactured domestically

• E.g. television broadcasting AMCA 55% of television from 6am to

midnight must be Australian made

Introduction

Practice

Study Skills Globalisation Protection Development Case Study

Export Incentives

• Provide domestic producers with assistance such as grants, tax

deductions, loans or technical advice to encourage entering in global markets or expand market share

• E.g. Export Market development grant scheme (EMDG) in Australia

which:

• Reimburses up to 50% of eligible export promotion expenses

above $5,000 provided that total expenses are at least $15,000

• Provides up to 8 grants to each eligible applicant

Introduction

Practice

Study Skills Globalisation Protection Development Case Study

Topic 3: Development

Study Skills Globalisation Protection Development Case Study

Economic Growth v Development

• Economic Growth = an increase in the value of goods and services

produced in an economy over a given period of time – Measured through changes in Gross Domestic Product

• Economic Development = qualitative measure of the human and

social capital of a nation – Measured through the UN HDI index

• Gross National Income/capita
• Mean years of schooling
• Life expectancy from birth

Study Skills Globalisation Protection Development Case Study

Link

• Increases in economic growth will lead to increases in economic

development

• Increased GDP = Increased national income
• Can be used to invest in healthcare and education
• Increased incomes = increased tax

Study Skills Globalisation Protection Development Case Study

Distribution of Income and Wealth

• How equally spread income and wealth is shared amongst the

members of a nation – Income: Rewards from labour – Wealth: Assets

• Inequality because not shared equally

Study Skills Globalisation Protection Development Case Study

practice

The Human Development Index (HDI)uses which of the following to measure development? (A) GDP per capita, life expectancy, inflation rate (B) GDP per capita, life expectancy, educational attainment (C) GDP per capita, death rate, educational attainment (D) Life expectancy, inflation rate, educational attainment

Study Skills Globalisation Protection Development Case Study

Classification of Economies

Study Skills Globalisation Protection Development Case Study

Differences between Nations: Domestic

• Natural Resources

– Oil rich countries have achieved high growth rates – Dutch Disease

• Labour supply and quality

– Education/productivity/motivation

• Access to capital and indebtedness

– Difficulty in gaining capital for investmentlow savings

• Entrepreneurial Culture

– Little incentive to operate in developing countries

• Political institutions

– Corruption and inefficiency can undermine confidence

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Differences Between Nations: International

• Global Trade System

– High protection = trading blocs

• Global Financial Architecture

– Access to financial markets à debt burdens – Investment flows

• Global Aid

– Foreign aid by high income countries was 0.29% of GWP – Phantom aid – no improvement in lives of money (admin payments)

• Technology

– Geared to needs of advanced economies

Study Skills Globalisation Protection Development Case Study

Environmental Sustainability

• Manufacturing of emerging and advanced economies creates high

levels of CO2 emissions

• Rio Earth Summit 1992 – substantial cooperation with 130

environmental treaties signed by rich nations

• Significant progress by advanced economies
• – EU to cut emissions by 40%
• – USA by 43% 2025
• – Average global temperatures rise by 3.5 degrees between 2000 and 2100
• – Paris talks to reduce greenhouse gases 2016
• Developing countries pursued economic growth at the cost of

environmental quality

Study Skills Globalisation Protection Development Case Study

Topic 4:

Case Study

Study Skills Globalisation Protection Development Case Study

Case Study:

• Main thing is to see how a country has embraced globalisation and

invited it into their country

• How strategies to enhance globalisation have effected their country
• How it has boosted economic growth and development

Study Skills Globalisation Protection Development Case Study

Case Study

• Want to look at both economic growth and development

– HDI increased from 0.432 in 1980 to .732 in 2005 – Increased life expectancy from 63.2 years to 72.9 – 400m less people in poverty from last 25 years – 1980’s GDP averaged 12% for 3 decades (previous 3%)

• Also the negatives

– Inequality – Environmental degradation

Study Skills Globalisation Protection Development Case Study

China

• Special Economic Zones
• TNC investment incentivised through tax cuts and the abundant
• labour supply
• Growth increased from 4% to 7% in 1980 as Investment contributed 40% -

employment increased

• Increase productivity
• Inequality – 40% still in absolute poverty
• Trade Reforms ‘Open Door Policy’
• Decreased protection levels and opened up to trade
• Average tariff in 1988 was 36% compared to 12% in 2012, agriculture tariffs

dropped from 65% in 1988 to 19% in 1995

Study Skills Globalisation Protection Development Case Study

Practice Question

Study Skills Globalisation Protection Development Case Study

Suggested Answer

Name of Economy: China

• China has promoted globalisation through it’s open door policy in

which it decreased it’s trade protection levels such as a 24% decrease in average tariffs.

• Because of this, other economies demanded China’s manufactured

goods which required them to increase production.

• In turn, this caused a drastic increase in pollution levels which

severely threatened air quality and thus caused respiratory illness throughout China.

Economics Head Start Lecture 2018

Go Good lu luck ck for th the HSC

Presented by: Isaac Dela Torre