QCE EconomicsPractice Examination 18

This paper covers

• Balance of payments — capital and financial account structure (FDI, portfolio, other investment, reserve assets)
• Net foreign liabilities (NFL) — composition, measurement, and implications for external stability
• Foreign direct investment (FDI) inflows into Australia's resources sector
• Current account deficit — income deficit, goods and services balance, linkages to financial account
• Exchange rate determination under Australia's floating regime — demand and supply of AUD
• External stability as a macroeconomic objective — sustainability benchmarks, NFL/GDP ratio
• AD/AS model — demand-side and supply-side analysis of FDI-driven resource investment
• Macroeconomic policy mix — fiscal, monetary, and microeconomic reform interactions
• Terms of trade — commodity price effects on the current account and economic growth
• Trade-offs between macroeconomic objectives — growth vs external stability vs income distribution
• Globalisation — structural change, income distribution effects, and living standards in Australia
• RBA monetary policy — cash rate transmission channels, lags, and limitations in the resource boom context

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.