QCE EconomicsPractice Examination 4

This paper covers

• Labour market analysis — underutilisation rate, unemployment types, discouraged workers, hidden unemployment
• Wage determination — labour market equilibrium, wage-price spiral, productivity-wage nexus
• AD/AS model — aggregate demand and supply shifts, output gap identification, price level effects
• Macroeconomic objectives — full employment, price stability, external stability, equitable income distribution, trade-offs
• Fiscal policy — budget stances, automatic stabilisers, multiplier effect, crowding out, structural vs cyclical deficit
• Monetary policy — RBA cash rate, four transmission channels (savings/investment, asset prices, exchange rate, expectations), lags and limitations
• Microeconomic/supply-side reform — labour market deregulation, enterprise bargaining, competition policy, productivity growth
• International economics — exchange rate determination, current account, terms of trade, net foreign liabilities
• Balance of payments — current account deficit, capital/financial account, external stability objective
• Globalisation — structural unemployment, income distribution, trade liberalisation, WTO
• Business cycle interpretation — leading/lagging indicators, recessionary/inflationary gaps
• Transmission mechanism — how cash rate changes flow through to inflation and real GDP

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.