QCE EconomicsPractice Examination 13

This paper covers

• Stagflation: simultaneous rising inflation and rising unemployment
• Fiscal policy: budget stances, automatic stabilisers, crowding out, limitations under stagflation
• Monetary policy: RBA cash rate, four transmission channels, lags, limitations under stagflation
• AD/AS model: demand-side and supply-side shocks, inflationary and recessionary gaps
• Aggregate supply/microeconomic reform policies: labour market reform, competition policy, deregulation
• Macroeconomic objectives: price stability, full employment, economic growth, external stability, equitable income distribution
• Trade-offs between macroeconomic objectives
• International economics: exchange rate effects, balance of payments, current account, external stability
• Business cycle, multiplier effect, demand-pull and cost-push inflation
• Policy mix evaluation: fiscal + monetary + supply-side coordination under stagflation

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.