QCE EconomicsPractice Examination 5

This paper covers

• Monetary policy dilemma: supply-side inflation vs. demand management
• AD/AS model — negative supply shock and stagflation
• RBA cash rate transmission channels
• Macroeconomic objectives: price stability vs. full employment trade-off
• Headline CPI vs. underlying inflation distinction
• Fiscal policy as complementary or alternative response
• Aggregate supply / microeconomic reform policies
• Balance of payments and external stability implications
• Exchange rate effects on import prices (J-curve, terms of trade)
• International trade: agricultural commodity markets and global food prices
• Business cycle indicators and macroeconomic conditions
• Income distribution effects of food price inflation

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.