Professional Documents
Culture Documents
Economics Paper - Powlmao and Loapowm
Economics Paper - Powlmao and Loapowm
Economics Paper - Powlmao and Loapowm
Economics
Total marks 100
Section I
General Instructions
Reading time 5 minutes
Working time 3 hours
Write using black or blue pen
Black pen is preferred
Board-approved calculators may
be used
Write your Centre Number and
Student Number at the top of
pages 9, 11, 13 and 15
Pages 28
20 marks
Attempt Questions 120
Allow about 35 minutes for this section
Section II
Pages 916
40 marks
Attempt Questions 2124
Allow about 1 hour and 15 minutes for this section
Section III
Pages 1718
20 marks
Attempt either Question 25 or Question 26
Allow about 35 minutes for this section
Section IV
Page 19
20 marks
Attempt either Question 27 or Question 28
Allow about 35 minutes for this section
Section I
20 marks
Attempt Questions 120
Allow about 35 minutes for this section
Use the multiple-choice answer sheet for Questions 120.
New Zealand
(C)
Year
1
2
3
(C)
$ billion ($bn)
Exports
100
Imports
150
Net Services
80
Net Income
-90
-15
Capital Transfers
50
Reserve Assets
According to the information above, which of the following statements is correct about
an economy with a floating exchange rate?
(A)
(B)
(C)
(D)
The graph shows the foreign exchange rate for the Australia Dollar.
AS1
$A/$US
AS0
90c
80c
AD
0
Quantity $A
Which of the following would cause the change in the exchange rate as shown above?
(A) A decrease in portfolio investment inflows
(B)
Which statement best describes the operation of fiscal policy in comparison to the
operations of monetary policy?
(A) Monetary policy has a longer transmission tie lag and is more effective in
stimulating the economy during a recession
(B)
consumption
(C) Fiscal policy has a more immediate impact on the economy and can influence
growth between economic sectors
(D) Monetary policy has a shorter transmission time lag and is more effective in
slowing the economy during a boom
CPI
250
100
345
120
What is the name of the body that is responsible for determining wages in
Australia?
(A) The Australian Industrial Relations Commission
4
(B)
10
The graph shows the demand for and supply of Australian dollars.
S1
$A in terms
of $US
S0
0.70
0.60
D
0
Q1
Q0
Quantity of $A
Which of the following is the most likely reason for the shift in the supply curve from
S0 to S1?
(A) An increase in foreign imports into Australia
(B) An increase in foreign financial investment in Australia
(C) A reduction in the net income deficit on the current account
(D) A decline in the international competitiveness of Australian firms
11
How would the Reserve Bank of Australia increase the cash rate in the short term money
market?
(A) Buy Government securities and increase liquidity
(B) Sell Government securities and increase liquidity
(C) Buy Government securities and decrease liquidity
(D) Sell Government securities and decrease liquidity
12
13 Which of the following best explains under-provision of public goods by the market
system?
(A) Only the government supplies public goods
(B)
14
Which of the following transactions would be recorded as a debit on the Current account
of the Balance of Payments?
(A) The purchase of shares in a US company by an
Australian Resident
(B)
15
16
Which is the most appropriate macroeconomic policy mix if the Australian economy is
experiencing inflationary pressures?
(A) A decrease in taxation and the sale of government securities by the Reserve Bank
6
(B)
17
Which of the following would least likely result from a centralize system of wage
determination
(A) A more equal distribution of income
(B) Lower levels of inflation
(C) Rising levels of productivity
(D) Lower wage growth
18 Which of the following types of inflation is least effectively addressed using monetary
policy
(A) Demand pull inflation
(B)
(C) They are also known as the structural component of the budget
(D) They reinforce fluctuations in economic activity
20
An industry that generates pollution incurs both private and social costs.
What will happen to the quantity and equilibrium price when BOTH private and social
costs are taken into account?
(A) Both output and price will fall.
(B)
Economics
Section II
40 marks
Attempt Questions 2124
Allow about 1 hour and 15 minutes for this section
Answer the questions in the spaces provided. These spaces provide guidance for the expected
length of response.
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
(b)
(c)
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
(c)
Discuss Government policies that can be ued to reduce wealth inequality in Australia
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
Economics
Section II (continued)
(i)
Year 1
Unemployment
1063000
1128000
1186000
...................................................................................................................
...................................................................................................................
...................................................................................................................
...................................................................................................................
(ii)
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2.
Question 22 (continued)
(b)
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
Examine the effectiveness of ONE economic policy used to reduce the rate of
unemployment
...............................................................................................................................
(C)
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
End of Question 22
Economics
Section II (continued)
$1.10
$1.00
...............................................................................................................................
...............................................................................................................................
(b)
Outline two factors that could have caused the movement in the diagram above
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
Question 23 (continued)
(b)
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
(d)
Explain the relationship between financial flows and the exchange rate
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
End of Question 23
Economics
Section II (continued)
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
(b)
Describe one recent trend in monetary policy and its effect in the economy
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
Question 24 (continued)
(c)
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
(d) Explain how the Reserve Bank of Australia can use domestic market operations
to lower inflation in a economy
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
Economics
Section III
20 marks
Attempt either Question 25 or Question 26
Allow about 35 minutes for this section
Answer the question in a writing booklet. Extra writing booklets are available.
In your answer you will be assessed on how well you:
demonstrate knowledge and understanding relevant to the question
use the information provided
apply relevant economic terms, concepts, relationships and theory
present a sustained, logical and cohesive response
OR
17
Section IV
20 marks
Attempt either Question 27 or Question 28
Allow about 35 minutes for this section
Answer the question in a SEPARATE writing booklet. Extra writing booklets are available.
In your answer you will be assessed on how well you:
demonstrate knowledge and understanding relevant to the question
apply relevant economic information, terms, concepts, relationships and theory
present a sustained, logical and cohesive response
End of paper
18
BLANK PAGE
20
Board of Studies NSW 2011