VCE EconomicsPractice Examination 12

This paper covers

• Microeconomics and an infrastructure-led construction boom: relative scarcity and opportunity cost, demand and supply with movements versus shifts, price elasticity of supply, and market failure from a positive externality with government subsidies and their unintended consequences (Unit 3 AOS 1).
• Domestic macroeconomic goals during the boom: aggregate demand (especially private I and public G2 infrastructure investment) and aggregate supply, strong and sustainable economic growth, low inflation, full employment and the NAIRU, with measurement (GDP, CPI, unemployment/participation) and goal conflicts feeding material and non-material living standards (Unit 3 AOS 2).
• The international economy and policy management: gains from trade and trade liberalisation, the terms of trade, exchange rate determination and effects, the balance of payments, alongside Unit 4 aggregate demand policies (budgetary and monetary) and aggregate supply policies (infrastructure, training, R&D, tax reform, immigration) evaluated as tools to manage the boom (Unit 3 AOS 3 and Unit 4 AOS 1 and AOS 2).

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.