QCE EconomicsPractice Examination 8

This paper covers

• Exchange rate determination under Australia's floating regime
• Balance of payments — current account, capital and financial account, net foreign liabilities
• External stability as a macroeconomic objective
• Terms of trade and commodity price cycles
• Demand-pull inflation and cost-push inflation
• AD/AS model — demand-side shocks, multiplier effects
• Monetary policy — RBA cash rate, four transmission channels, lags and limitations
• Fiscal policy — budget stances, automatic stabilisers, crowding-out
• Aggregate supply and microeconomic reform
• Trade-offs between macroeconomic objectives
• International trade theory — comparative advantage, terms of trade
• Trade barriers — tariffs, quotas, subsidies, welfare effects
• WTO and trade agreements
• Globalisation effects on structural unemployment and income distribution
• Macroeconomic indicators — unemployment, inflation, economic growth

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.