QCE EconomicsPractice Examination 1

This paper covers

• Monetary policy transmission channels and RBA cash rate mechanism
• AD/AS model — demand-side shocks and policy responses
• Macroeconomic objectives: price stability, full employment, economic growth, external stability, equitable income distribution
• Trade-offs between macroeconomic objectives
• Fiscal policy vs monetary policy effectiveness
• Balance of payments: current account deficit, net foreign liabilities, external stability
• Exchange rate determination under Australia's floating regime
• International trade: comparative advantage, trade patterns, globalisation effects
• Trade barriers: tariffs, quotas, subsidies and welfare effects
• Aggregate supply/microeconomic reform policies
• Business cycle interpretation using macroeconomic indicators
• Budget stances: expansionary, contractionary, neutral; automatic stabilisers
• Limitations of monetary policy: lags, asset price transmission, distributional effects
• Income distribution and equitable distribution objective
• Housing market economics and interest rate sensitivity

Students are permitted to bring into the examination the materials normally allowed for this subject. Answer all questions in the spaces provided.

This is an ATARMAxxing practice paper. It is not an official examination and is not affiliated with, endorsed by, or produced by the VCAA, NESA or the QCAA.