2020 Economics Written examination...ECONOMICS Written examination Tuesday 24 November 2020 Reading...
Transcript of 2020 Economics Written examination...ECONOMICS Written examination Tuesday 24 November 2020 Reading...
ECONOMICSWritten examination
Tuesday 24 November 2020 Reading time: 2.00 pm to 2.15 pm (15 minutes) Writing time: 2.15 pm to 4.15 pm (2 hours)
QUESTION AND ANSWER BOOK
Structure of bookSection Number of
questionsNumber of questions
to be answeredNumber of
marks
A 15 15 15B 4 4 65
Total 80
• Studentsarepermittedtobringintotheexaminationroom:pens,pencils,highlighters,erasers,sharpenersandrulers.
• StudentsareNOTpermittedtobringintotheexaminationroom:blanksheetsofpaperand/orcorrectionfluid/tape.
• Nocalculatorisallowedinthisexamination.
Materials supplied• Questionandanswerbookof24pages• Answersheetformultiple-choicequestions• Additionalspaceisavailableattheendofthebookifyouneedextraspacetocompleteananswer.
Instructions• Writeyourstudent numberinthespaceprovidedaboveonthispage.• Checkthatyournameandstudent numberasprintedonyouranswersheetformultiple-choice
questionsarecorrect,andsignyournameinthespaceprovidedtoverifythis.• AllwrittenresponsesmustbeinEnglish.
At the end of the examination• Placetheanswersheetformultiple-choicequestionsinsidethefrontcoverofthisbook.
Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room.
©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2020
SUPERVISOR TO ATTACH PROCESSING LABEL HEREVictorian Certificate of Education 2020
STUDENT NUMBER
Letter
2020ECONOMICSEXAM 2
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SECTION A–continued
SECTION A – Multiple-choice questions
Instructions for Section AAnswerallquestionsinpencilontheanswersheetprovidedformultiple-choicequestions.Choosetheresponsethatiscorrectorthatbest answersthequestion.Acorrectanswerscores1;anincorrectanswerscores0.Markswillnotbedeductedforincorrectanswers.Nomarkswillbegivenifmorethanoneansweriscompletedforanyquestion.
Question 1Whichoneofthefollowingactionsareeconomistsmostlikelytoconsiderasinvestmentexpenditure?A. anindividualbuyingsharesB. asupermarketinstallingself-servecheckoutsC. acompanypayingitsworkershigherwagesD. ahouseholdpurchasingahomeentertainmentunit
Question 2Whichoneofthefollowingisaleakagefromthecircularflowmodelofincome?A. anincreaseinconsumptionspendingB. transferpaymentsmadebythegovernmentC. anincreaseinimportsD. anincreaseininvestmentspending
Question 3Whichoneofthefollowingbestdescribesthecharacteristicsofapublicgood?A. excludableandrivalrousB. excludableandnon-rivalrousC. non-excludableandrivalrousD. non-excludableandnon-rivalrous
Question 4IfAustralia’sforeignequityassetsexceeditsforeignequityliabilities,thismeansthatA. AustraliahasinvestedlessoverseasthanforeignershaveinvestedinAustralia.B. AustraliahasinvestedmoreoverseasthanforeignershaveinvestedinAustralia.C. theAustralianGovernmenthasincreaseditsborrowingsfromoverseastofundbudgetdeficits.D. theAustralianGovernmenthasdecreaseditsborrowingsfromoverseastofundbudgetdeficits.
Question 5Theimpositionofatariffwouldcausewhichoneofthefollowing?A. adecreaseinthepriceofimportsandariseinthedemandforimportsB. anincreaseinthepriceofimportsandariseinthedemandforimportsC. adecreaseinthepriceofimportsandariseinthedemandforimport-competingdomesticgoodsD. anincreaseinthepriceofimportsandariseinthedemandforimport-competingdomesticgoods
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SECTION A – continuedTURN OVER
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Question 6AnimprovementinAustralia’scurrentaccountbalanceismostlikelytooccurwhenA. thetradebalancesurplusincreases.B. thetermsoftradedeteriorate.C. theAustraliandollarappreciates.D. China’seconomicgrowthslows.
Question 7SupposetheAustralianGovernmentwaspayingsubsidiestobeekeepers.Ifthegovernmentreducedorremovedthesesubsidies,the mostlikelyeffectonthepriceofhoneywouldbeA. anincreaseinprice,astherewouldbeanincreaseinthedemandforhoney.B. adecreaseinprice,astherewouldbeadecreaseinthedemandforhoney.C. adecreaseinprice,astherewouldbeanincreaseinthesupplyofhoney.D. anincreaseinprice,astherewouldbeadecreaseinthesupplyofhoney.
Question 8Whichoneofthefollowingisleastlikelytobeanexampleofamonetarypolicytransmissionmechanismresultingfromlowerinterestrates?A. anincreaseinnetcapitalinflowB. anincreaseinborrowingsforhousinginvestmentC. adecreaseinimportsresultingfromafallinthevalueoftheAustraliandollarD. anincreaseinexportsresultingfromafallinthevalueoftheAustraliandollar
Question 9ThepriceelasticityofdemandforaproductwillbegreaterA. themoreresponsivetheindustrysupplycurveisfortheproduct.B. thelargerthenumberofsubstitutesfortheproduct.C. thelowertheproportionoftheirincomeconsumersspendontheproduct.D. themorenecessaryconsumersregardtheproducttobefortheirconsumption.
Question 10Afallintheequilibriumpricebutnochangeinequilibriumquantitycouldonlyoccurfromwhichoneofthefollowingcombinations?A. adecreaseindemandandanincreaseinsupplyB. anincreaseindemandandadecreaseinsupplyC. adecreaseinbothdemandandsupplyD. anincreaseinbothdemandandsupply
2020ECONOMICSEXAM 4
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SECTION A–continued
Question 11Whichoneofthefollowingwouldmostlikelyhappenifallcountriesagreedtosignificantlyreducecarbonemissionsbymovingtowardsagreaterrelianceonrenewableenergysources?A. ThedemandforAustraliancoalwouldincreaseandthepricereceivedforcoalexportswouldrise.B. ThedemandforAustraliancoalwoulddecreaseandthepricereceivedforcoalexportswouldfall.C. ThedemandforAustraliannaturalgaswoulddecreaseandthepricereceivedfornaturalgasexports
wouldrise.D. ThedemandforAustraliannaturalgaswouldincreaseandthepricereceivedfornaturalgasexports
wouldfall.
Question 12Thelabourforceunder-utilisationratemeasurestheA. unemployedasapercentageofthelabourforce.B. unemployedandunderemployedasapercentageofthelabourforce.C. underemployedasapercentageofthepopulationaged15yearsandover.D. unemployedandunderemployedasapercentageofthepopulationaged15yearsandover.
Question 13ConsiderthefollowinghypotheticalAustralianGovernmentBudgetfigures.
Item Amount (billions)
totalreceipts $200
totaloutlays $175
netcashflowsfrominvestmentsinfinancialassets(IFAPP) $10
FutureFundearnings $5
Whatisthesizeoftheunderlyingcashsurplus?A. $10billionB. $25billionC. $30billionD. $40billion
Question 14Whichcombinationofaggregatesupplypolicieswillhaveadifferentoveralleffectonthegoaloffullemploymentthantheothercombinationsgiven?A. anincreaseinresearchanddevelopmentgrants,increasedspendingontrainingandeducation,aboost
ininvestmentininfrastructureB. areductioninsubsidiesforinfantindustriescompetingwithimports,adecreaseinspendingontraining
andeducation,areductionininvestmentininfrastructureC. areductionintariffprotectionintheeconomy,areductioninthepersonalincometaxrates,areduction
inspendingontrainingandeducationD. amovetowardsfreetrade,areductioninthecompanytaxrate,areductioninresearchanddevelopment
grants
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END OF SECTION A TURN OVER
Question 15Whichoneofthefollowingisthemostlikelytocausecostinflation?A. excessdemandforgoodsandservicesB. thegovernmentreducingcompanytaxratesC. expectationsbyemployersthatinterestrateswillfallD. anincreaseinsuperannuationcontributionspaidbyemployers
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SECTION B – Question 1–continued
Question 1 (16marks)
Thelowercashratehasputdownwardpressureontheexchangerate,whichissupportingactivityacrossarangeofindustries.
Source:statementbyPhilipLowe,GovernoroftheReserveBankofAustralia, ‘MonetaryPolicyDecision’,mediarelease,3December2019,
<www.rba.gov.au>
a. DescribehowalowercashrateinAustraliaputsdownwardpressureonthevalueoftheexchangerateandhowthismightsupportactivityacrossarangeofindustries. 4marks
SECTION B – Written responses
Instructions for Section BAnswer allquestionsinthespacesprovided.
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SECTION B – Question 1–continuedTURN OVER
b. ExplainthelikelyimpactofeachofthefollowingscenariosonAustralia’sexchangerate. 6marks
• Thereisafavourablemovementinthetermsoftrade.
• Thereisaslowdowninglobaleconomicgrowth.
2020ECONOMICSEXAM 8
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SECTION B – Question 1–continued
c. ExplainhowdownwardpressureonAustralia’sexchangeratemightinfluenceeachofthe following. 6marks
• Australia’sbalanceofpaymentsoncurrentaccount
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SECTION B – continuedTURN OVER
• Australia’smaterialandnon-materiallivingstandards
2020ECONOMICSEXAM 10
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SECTION B – Question 2–continued
Question 2 (21marks)a. DescribetwoeconomicreasonswhytheAustralianGovernmentmightfinditdifficultto
achieveabudgetsurplusintheshorttomediumterm. 4marks
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SECTION B – Question 2–continuedTURN OVER
b. Explaintheroleofautomaticstabilisersininfluencingaggregatedemandandstabilisingthebusinesscyclein2020. 5marks
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SECTION B – Question 2–continued
c. Describehowtwodiscretionarybudgetarypolicyinitiativesannouncedineither2019or2020mightinfluenceaggregatedemandandtheachievementofthedomesticmacroeconomicgoalofstrongandsustainableeconomicgrowth. 6marks
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SECTION B – continuedTURN OVER
d. Evaluatetheeffectivenessofmonetarypolicyin2020inachievingtheAustralianGovernment’sdomesticmacroeconomicgoaloffullemployment. 6marks
2020ECONOMICSEXAM 14
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SECTION B – Question 3–continued
Question 3 (10marks)a. Explaintherelationshipbetweenanefficientallocationofresourcesandaggregatesupply. 4marks
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SECTION B – continuedTURN OVER
b. Explainhowthefollowingaspectsofbudgetarypolicymightinfluenceaggregatesupplyandtheachievementofstrongandsustainableeconomicgrowth. 6marks
• Spendingontrainingandeducation
• Investmentininfrastructure
2020ECONOMICSEXAM 16
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SECTION B – Question 4–continued
Question 4 (18marks)a. Explainthenatureof,andconditionsfor,aperfectlycompetitivemarket. 3marks
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SECTION B – Question 4–continuedTURN OVER
b. Inacompetitivemarket,explainhowanincreaseindemandforaproductmightresultinachangeinrelativeprices,andexplainhowthiswouldinfluenceresourceallocationandlivingstandards. 5marks
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SECTION B – Question 4–continued
c. Describeonestrengthandoneweaknessassociatedwiththeuseofthemarkettoallocateresources. 4marks
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TURN OVER
d. Usingafullylabelleddemandandsupplydiagram,explainhowtheAustralianGovernmentcouldcorrectamarketfailure. 6marks
END OF QUESTION AND ANSWER BOOK
2020ECONOMICSEXAM 20
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Extra space for responses
Clearly number all responses in this space.
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TURN OVER
2020ECONOMICSEXAM 22
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TURN OVER
2020ECONOMICSEXAM 24
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Ananswerbookisavailablefromthesupervisorifyouneedextraspacetocompleteananswer.Pleaseensureyouwriteyourstudent numberinthespaceprovidedonthefrontcoveroftheanswerbook.At the end of the examination, place the answer book inside the front cover of this question and answer book.