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QATsQuality Assessment Tasks

of 12 © 2017 Published by QATS. Permission for copying in purchasing school only. Ser6ECU3O2A

Introduction

NAME:

UNIT 3 ■ OUTCOME 2VCE® Economics

SCHOOL-ASSESSED COURSEWORK

Outcome 2Analyse key contemporary factors that may have influenced the Australian Government’s domestic macroeconomic goals over the past two years and discuss how achievement of these goals may affect living standards.

TaskStructured questions

This task will be marked out of 30.

It will contribute 50% of the marks (30) allocated for this outcome. A second task will be completed for this outcome.

The task has been designed to allow achievement up to and including the highest level in the Performance Descriptors.

You have 45 minutes (plus 5 minutes reading time).

NO access to any materials.

Answer multiple choice questions on the multiple choice answer sheet provided and written response questions in the space provided.

Your teacher will advise you of any variation to these conditions.

This task covers a range of key knowledge and key skills from this outcome.

of 12 © 2017 Published by QATS. Permission for copying in purchasing school only.

Task

QATs ■ VCE® Economics ■ SCHOOL-ASSESSED COURSEWORK, UNIT 3, OUTCOME 2

Ser6ECU3O2A

Section A: Multiple choice (20 marks)

Question 1What is the largest component of Aggregate Demand?A. Private investment spendingB. Private consumption spendingC. Government spendingD. Export spending

Question 2What is the most volatile component of Aggregate Demand?A. Private investment spendingB. Private consumption spendingC. Government spendingD. Export spending

Question 3 Which of the following is the formula for calculating Real Unit Labour Costs (RULCs)?A. Average cost of labour Average labour productivityB. Average cost of labour (adjusted for inflation) Average labour productivityC. Average labour productivity Average cost of labour (adjusted for inflation)D. Average labour productivity Average cost of labour

Question 4An appreciating Australian dollar will:A. increase AD and AS.B. decrease AD and AS.C. increase AD but decrease AS.D. decrease AD but increase AS.

Question 5Which of the following would increase Aggregate Supply?A. An increase in the number of resources availableB. An increase in productivityC. An increase in the cost of resourcesD. Both (A) and (B)

Question 6Which of the following best indicates an improvement in non-material living standards?A. An increase in real GDP per capitaB. A decrease in disposable incomeC. A fall in crime ratesD. A fall in literacy rates


Task


Question 7Which of the following is not considered a leakage in the circular flow model?A. TaxationB. Private investment spendingC. SavingD. Import spending

Question 8At which of the following stages of the business cycle are living standards maximised?A. PeakB. TroughC. BoomD. Domestic economic stability

Question 9Which of the following best describes the Aggregate Demand and Aggregate Supply curves?A. The AD curve slopes upwards and the AS curve slopes downwardsB. The AD curve slopes downwards and the AS curve slopes upwardsC. The AD and AS curves both slope upwardsD. The AD and AS curves both slope downwards

Question 10Which of the following is not considered a macroeconomic demand factor?A. Disposable incomeB. Private consumption spendingC. Economic activity overseasD. Business confidence

Question 11Which of the following is not considered a macroeconomic supply factor?A. Business confidenceB. The exchange rateC. Technological changeD. Climatic conditions

Question 12On an AD/AS graph, what is the y (vertical) axis labelled?A. PriceB. QuantityC. General price levelD. Real GDP


Task


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Question 13How will a cut in interest rates tend to impact the following three economic indicators?

The level of economic growth Unemployment Price levelsA. Rise Fall RiseB. Rise Rise FallC. Fall Rise RiseD. Rise Fall Fall

Question 14How will lower production costs tend to impact the following three economic indicators?

The level of economic growth Unemployment Price levelsA. Rise Fall RiseB. Rise Rise FallC. Fall Rise RiseD. Rise Fall Fall

Question 15During which point in the business cycle is inflation likely to be at its highest?A. PeakB. Trough C. ExpansionD. Contraction

Question 16Which of the following is most likely to reduce unemployment?A. Low interest ratesB. Weaker economic activity in ChinaC. Weak consumer confidenceD. Low business confidence

Question 17If unemployment exists, then this necessarily means that:A. the production possibility frontier shifts inwards.B. the production possibility frontier shifts outwards.C. the economy is operating outside its production possibility frontier.D. the economy is operating inside its production possibility frontier.

Question 18Which of the following will have an impact on the level of economic activity that is different from the others?A. A fall in consumer confidenceB. A rise in business confidenceC. A fall in the level of industrial actionD. Improvements in labour productivity


Task


Question 19To maximise living standards, governments should try to:A. moderate AD counter-cyclically.B. minimise AD.C. maximise peaks and troughs.D. maximise AD.

Question 20China’s growth has slowed recently. How may this impact the components of Aggregate Demand?A. Growth in both X and M will fallB. Growth in M will fallC. Growth in X will fallD. Growth in X will rise


Task


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Section B: Written responses (10 marks)

Question 1Explain the difference between material and non-material living standards and identify an example of each.

3 marks

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Question 2Define the term ‘Aggregate Demand’.

2 marks

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Task


Question 3Explain how one factor might have caused an increase in Aggregate Demand (AD) in Australia over the past two years. Outline how this factor might have impacted economic growth, employment and material living standards.

5 marks

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Total: 30 marks


Task


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Multiple-choice answer sheet

NAME: _____________________________________

Shade the best answer to each question in pencil.

If you make a mistake, you must completely erase it.

A B C D123456789

1011121314151617181920



TeacherAdvice

Key knowledge and key skills

The following key knowledge is the focus of this task:

The nature and purpose of economic activity • the difference between material and non-material living standards• factors that may influence living standards including access to goods and services,

environmental quality, physical and mental health, life expectancy, crime rates and literacy rates • the circular flow model of income including the role of households, businesses, government,

financial institutions and the external sector in an open contemporary macroeconomy• the nature and causes of the business cycle • the meaning and importance of aggregate demand and the factors that may influence the

level of aggregate demand in the economy: changes in the general level of prices, disposable income, interest rates, consumer confidence, business confidence, the exchange rate and rates of economic growth overseas

• the aggregate demand curve • the meaning and importance of aggregate supply and the factors that may influence the level

of aggregate supply in the economy: changes in the general level of prices, quantity and quality of the factors of production, cost of production, technological change, productivity growth, exchange rates and climatic conditions

• the aggregate supply curve • the effects of changes in aggregate demand and aggregate supply on the level of economic

growth, employment and price levels.

The following key skills are the focus of this task:• define key economic concepts and terms and use them appropriately • explain trends, patterns, similarities and differences in economic data and other information • apply economic concepts and theories to explain the nature and importance of the Australian

Government’s domestic macroeconomic goals

Extract from VCAA VCE® Economics Study Design. © VCAA. Used with permission.

The copyright in this material is owned by the Victorian Curriculum and Assessment Authority (VCAA). Used with permission.



Ser6ECU3O2A

TeacherAdvice

Highest performance descriptor

The following table indicates the relationship between the highest level of the Performance Descriptor and the questions in this task.

Aspect of ‘Very High’ Performance Descriptor Question/s

Comprehensive and detailed analysis of a range of key contemporary factors that may have influenced the Australian Government’s domestic macroeconomic goals over the past two years.

3

Very thorough and logical discussion of how achievement of the Australian Government’s domestic macroeconomic goals might affect living standards.

See other task for this outcome

Confident and accurate definition, use and application of economics terms, concepts and theories. Sophisticated use of relevant data and evidence to support the analysis and discussion.

1, 2, 3

Comprehensive and logical analysis of the interrelatedness of economic relationships demonstrating highly developed skills of economic reasoning and interpretation. Sophisticated ability to synthesise arguments and draw conclusions.

3

Note: This is one of two tasks for this outcome. The mark out of 30 for this task will be converted to a score out of 15. Some rounding may be required.

Reproduced by permission from the VCE® Economics Advice for Teachers (2017–2021) © VCAA. Selected content from the VCE® Study Designs and Advice for Teachers is owned by the Victorian Curriculum and Assessment Authority (VCAA) and reproduced with permission. VCE is a registered trademark of the VCAA.

The VCAA does not endorse this publication and makes no warranties regarding the correctness or accuracy of its content. To the extent permitted by law, the VCAA excludes all liability for any loss or damage suffered or incurred as a result of accessing, using or relying on the content.

NOTE: This task is sold on condition that it is NOT placed on any school network or social media site (such as Facebook, Wikispaces etc.) at any time.

NOT FOR USE BY PRIVATE TUTORS.

Assessment planning

This task is best completed around weeks 2–3 of term 2, and should be undertaken before task Ser6ECU3O2B.



SolutionPathway

Below are suggested responses.

Part A: Multiple choice (20 marks)

A B C D1 x2 x3 x4 x5 x6 x7 x8 x9 x

10 x11 x12 x13 x14 x15 x16 x17 x18 x19 x20 x



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SolutionPathway

Part B: Written responses (10 marks)

Question 1 (3 marks)• 1 mark: define material living standards.• 1 mark: define non-material living standards.• 1 mark: identify an example of both material and non-material living standards.

Material living standards refer to how many goods and services can be consumed, whereas non-material living standards refer to quality of life aspects unconnected to material possession. A common measure of material living standards is real GDP per capita, whereas some examples of non-material living standards are literacy rates, crime rates and population density.

Question 2 (2 marks)• 1 mark: define Aggregate Demand simply.• 1 mark: define Aggregate Demand comprehensively.

Aggregate Demand (AD) is total spending on Australian-made goods and services over a period of time (usually a year). It is calculated by the formula Aggregate Demand = private consumption spending (C) + private investment spending (I) + government spending (G) + export spending (X) – import spending (M).

Question 3 (5 marks)• 1 mark: identify a relevant factor.• 1 mark: explain how the factor might have increased Aggregate Demand.• 1 mark: outline the impact on economic growth.• 1 mark: outline the impact on employment.• 1 mark: outline the impact on material living standards.

One factor which might have caused an increase in Aggregate Demand (AD) in Australia in the past two years is low interest rates. With low interest rates, households are incentivised to spend on credit because the cost of doing so (including interest repayments) has fallen. This will in turn increase private consumption spending (C) and AD. With an increase in AD, firms will notice higher sales and will therefore lift production. An increase in production constitutes economic growth. With higher production, firms will require more resources including labour, thus causing a rise in employment. With higher employment, people will experience higher incomes as they potentially move from transfer incomes to higher factor incomes, causing a greater capacity to purchase goods and services. Thus, material living standards will improve.

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