2017 HSC Economics - ----- PDF

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HIGHE R SCHOOL CE RT IFI CATE

2017

EXA M INATION

Economics Section III 20 marks Attempt either Question 25 or Question 26 Allow about 35 minutes for this section Answer the question in the Sections III and IV Writing Booklet. Extra writing booklets are available. Your answer 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 Question 25 (20 marks) Analyse the implications of a decline in global economic activity for Australia’s economic policies. In your response, refer to the economic information provided. A flexible exchange rate helps soften the impact of external shocks on an economy, such that monetary and fiscal policy can be directed towards achieving domestic economic policy objectives. Adapted from The Exchange Rate and the Reserve Bank’s Role in the Foreign Exchange Market, February 2017 © Reserve Bank of Australia

Australia’s terms of trade and cash rate, 2010–2016 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

160.0 140.0 120.0 100.0 80.0 60.0

terms of trade

OR 2032

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cash rate

Mar-16

Mar-15

Mar-14

Mar-13

Mar-12

Mar-11

Mar-10

40.0 20.0 0.0

Question 26 (20 marks) Analyse the role that the Australian government’s economic policies play in achieving price stability in Australia. In your response, refer to the economic information provided. Despite depreciation of the Australian dollar, inflation has declined due to a range of factors including heightened retail competition, moderation in conditions in housing markets and declines in the costs of business inputs such as fuel and utilities. Adapted from the Minutes of the Monetary Policy Meeting of the Reserve Bank Board, 3 May 2016 © Reserve Bank of Australia

Australian TWI, wage growth, cash rate and CPI: 2010–2016

cash rate

Mar-16

Mar-15

Mar-14

Mar-13

Mar-12

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Mar-11

Mar-10

90 80 70 60 50 40 30 20 10 0

trade weighted index (TWI)

consumer price index (CPI)

wage growth

– 22 –

Section IV 20 marks Attempt either Question 27 or Question 28 Allow about 35 minutes for this section Answer the question in the Sections III and IV Writing Booklet. Extra writing booklets are available. Your answer 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 Question 27 (20 marks) With reference to BOTH Australia AND one other economy, compare and contrast the effects of globalisation on economic growth and environmental sustainability. OR Question 28 (20 marks) Explain how labour market policies can be used to achieve Australia’s economic objectives.

End of paper

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