QCE EconomicsPractice Examination 3

This paper covers

• International trade theory — comparative advantage and gains from trade
• Effects of tariff elimination on domestic producers, consumers and government revenue
• Balance of payments — current account, trade balance, terms of trade
• Exchange rate determination under Australia's floating regime
• External stability as a macroeconomic objective
• AD/AS model — aggregate demand shifts from trade liberalisation
• Macroeconomic objectives and trade-offs (growth, employment, price stability, external stability, income distribution)
• WTO, bilateral FTAs and trade liberalisation policy
• Welfare effects of trade barriers and their removal
• Fiscal policy and monetary policy responses to changing economic conditions
• Structural unemployment and income distribution effects of globalisation
• Microeconomic/aggregate supply-side reform policies

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.