Education Assignment | Homework For You
The assignment consists of four questions. You should allocate at least half a page (or 250 words) to each answer. You may refer to academic literature and textbooks to help answer the questions.
You must write your answers in a Microsoft Word document and submit it online in vUWS on or before the due date.
You should provide a ‘reference list’ of the literature you have used. Plagiarism is forbidden and all assignments will be electronically checked for plagiarism before they are marked.
ï© Note: Wikipedia and anonymous amateur blogs should not be used as references. For definitions and basic concepts, your first ‘port of call’ should be a textbook.
1. Education is an example of positive externalities with positive spill over effect. This is the rationale for government to support higher education to increase the public benefit when market failure exists and drive the education system towards its socially optimal level.
a) Using appropriate diagram/s, indicate the private provision of higher education and socially optimal level of higher education (without any funding/subsidies provided by the government). Explain why private market cannot provide the socially optimal level of education. (2 marks)
b) Suppose that Australian universities have been receiving enough funding to provide socially optimal level of higher education. However, the Federal Budget 2017 has indicated to have substantial funding cut to higher education. “Labour is pleading to block a $2.8 billion funding cut to the higher education sector which will force the students to pay off loans earlier and make degrees more expensive”. Using appropriate diagram/s, illustrate the socially optimal level of higher education with government funding and the outcome of $2.8 billion funding cut if the proposed reform pass through parliament (4 marks)
2. Investment expenditure is one of the key components of GDP (expenditure method). Lack of investors’ confidence in the recent years is alleged to be the main reason for slower economic growth and rising Australia’s unemployment rate. Discuss the trend in gross domestic investment expenditure and explain the effect of declining investment spending on the equilibrium output using Keynesian Cross model. (3 marks)
3. Is Australia operating at a full employment level of output? What is the current unemployment rate? Is this unemployment rate is considered to be cyclical unemployment? Explain three causes and consequences of cyclical unemployment. (4 marks)
4. Consider an economy with the following characteristics:
Consumption function is C = 100 + 0.8YD;
Planned investment: I = 50;
Government expenditure: G = 60;
The tax function: T = 0.3Y;
Exports of the country: X = 20
The import function: M = 10 + 0.1Y.
Assume there are no transfer payments and no autonomous taxes.
All variables are in billions of dollars. C is consumption expenditure; YD is disposable income; Y is real GDP; G is government purchases of goods and services; T is taxes; I is planned investment expenditure; X is exports, and M is imports.
a. Write the aggregate expenditure function and find out the value of equilibrium level of income of the economy (3 marks)
b. What is the value of consumption expenditure of the economy? (2 marks)
Define the concept of multiplier. Calculate the size of the multiplier of the economy if government expenditure rises from $60 billion to $100 billion. (2 marks) Get Economics homework help today