Economics questions and solutions

Browse original practice and official past-paper questions. Each question has its own link, with its source and worked solution.

186 questions · Page 1 of 8

1. Q1 · 2025 QCAA · Paper 1 · 1 mark
   QUESTION 1 Identify a transfer payment in the federal budget. (A) military personnel wages (B) aged pension payments (C) new highway costs (D) indirect taxation
   Economic management
2. Q2 · 2025 QCAA · Paper 1 · 1 mark
   QUESTION 2 What happens when the Reserve Bank of Australia decides to decrease the cash rate? (A) Bank deposit rates rise. (B) Banks pass on the rate change as soon as possible. (C) Financial institutions raise variable and fixed loan rates. (D) Interest rates change depending on each financial institution.
   Economic management
3. Q3 · 2025 QCAA · Paper 1 · 1 mark
   QUESTION 3 Which reason is a justification for applying a demand-side economic policy in Australia? (A) to decrease cyclical unemployment (B) to maximise real economic growth (C) to enhance dynamic efficiency (D) to reduce business regulations
   Economic management
4. Q4 · 2025 QCAA · Paper 1 · 1 mark
   QUESTION 4 If an economy is in an expansionary phase, automatic stabilisers should (A) increase employment. (B) raise income tax rates. (C) increase income tax revenues. (D) raise unemployment payments.
   Economic management
5. Q5 · 2025 QCAA · Paper 1 · 1 mark
   QUESTION 5 Which group is the most likely to be impacted by contractionary monetary policy? (A) households with high levels of debt (B) financial institutions with high profits (C) state governments that provide essential services (D) businesses that produce relatively inelastic goods
   Economic management
6. Q6 · 2025 QCAA · Paper 1 · 1 mark
   QUESTION 6 Ceteris paribus, which pair of policies is incompatible? Policy 1 Policy 2 (A) decreasing vehicle subsidies lowering a budget deficit (B) minimising skilled migration restricting national defence spending (C) maintaining minimum wages enhancing international competitiveness (D) increasing goods and services tax improving household equity
   Economic management
7. Q7 · 2025 QCAA · Paper 1 · 1 mark
   QUESTION 7 Assume the Federal Government has decided to proceed with 80 essential infrastructure projects and cease spending on 100 proposed infrastructure projects. A possible rationale for this decision is that the economy (A) does not require infrastructure at this time. (B) is at a low point on the economic cycle. (C) is already operating at peak capa…
   Economic management
8. Q8 · 2025 QCAA · Paper 1 · 1 mark
   QUESTION 8 Identify the diagram that does not illustrate the result, ceteris paribus, of a microeconomic reform. (A) (B) Price GDP LRAS level growth Trend2 Trend1 P2 P1 AD2 AD1 Y1 Y2 Real GDP (Y) Time (years) (C) (D) Price Capital AS1 level goods 2 AS2 B A P1 P2 AD2 1 AD1 Real GDP (Y) Y1 Y2 Consumer goods
   Economic management
9. Q9 · 2025 QCAA · Paper 1 · 1 mark
   QUESTION 9 Assume the unemployment rate is 4% and wages are rising. Ceteris paribus, what is the least appropriate policy response in the Australian labour market? (A) maintaining youth employment subsidies paid to employers (B) creating additional training opportunities for apprentices (C) raising the quota of skilled migration to Australia (D) introduc…
   Economic management
10. Q10 · 2025 QCAA · Paper 1 · 1 mark
    QUESTION 10 Data for a hypothetical Australian scenario is shown. New vehicle Retail sales registrations rising by 10% rising by 3% per annum over the year Inflation Australian expectations dollar of 2% depreciating per quarter Ceteris paribus, what are the appropriate policy responses? (A) increasing the cash rate and increasing the budget deficit (B) inc…
    Economic management
11. Q11 · 2025 QCAA · Paper 1 · 4 marks
    QUESTION 11  (4 marks) Explain two potential issues that could arise from the Australian cash rate decreasing from 0.25% to 0.1% during a recessionary period.
    Economic management
12. Q12 · 2025 QCAA · Paper 1 · 4 marks
    QUESTION 12  (4 marks) Explain the aim of microeconomic reform and why it is important to Australia’s gross domestic product per capita. Provide an example in your response.
    Economic management
13. Q13 · 2025 QCAA · Paper 1 · 7 marks
    QUESTION 13  (7 marks) Assume the following is a scenario experienced by Australia. The Organisation for Economic Co-operation and Development (OECD) has confirmed that the current Australian high inflation scenario is unlike those in the past. Health and natural disasters, plus disruptions due to international political events, have restricted the global su…
    Macroeconomic objectives and theory
14. Q14 · 2025 QCAA · Paper 1 · 10 marks
    QUESTION 14  (10 marks) Data for a hypothetical economic issue in Australia is shown. Inflation rate, Australia % 8 7 6 5 4 3 2 1 0 −1 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Regional differences in the unemployment rate, Australia % 16 14 12 10 8 6 4 2 0 1996 1999 2002 2005 2008 2011 2014 2017 2020 2023 Key Highest regional unemployment rate…
    Macroeconomic objectives and theory
15. Q15 · 2025 QCAA · Paper 1 · 26 marks
    QUESTION 15  (26 marks) The Australian Government is reviewing the economic issue of rental housing. a) Draw a demand and supply diagram that represents a situation where the government places a limit on housing rent rises, resulting in a price ceiling. [4 marks] b) Analyse the economic issue of rental housing in Australia. Using the criterion of living s…
    Economic management
16. Q1 · 2024 QCAA · Paper 1 · 1 mark
    QUESTION 1 In the Australian federal budget, the spending component that has increased most significantly over the past five years is (A) the National Disability Insurance Scheme. (B) public order and safety. (C) childcare subsidies. (D) medical benefits.
    Economic management
17. Q2 · 2024 QCAA · Paper 1 · 1 mark
    QUESTION 2 The principal medium-term objective of monetary policy is to (A) influence the value of the Australian dollar. (B) increase gross domestic product. (C) reduce structural employment. (D) control inflation.
    Economic management
18. Q3 · 2024 QCAA · Paper 1 · 1 mark
    QUESTION 3 Ceteris paribus, what is the effect of a significant increase in migration to Australia? (A) The labour supply curve expands. (B) The aggregate demand curve expands. (C) The aggregate supply curve shifts to the left. (D) The housing demand curve shifts to the right.
    Economic management
19. Q4 · 2024 QCAA · Paper 1 · 1 mark
    QUESTION 4 At which point in the economic cycle should an increase in the cash rate have the desired effect? Real GDP II I IV III Time (A) I (B) II (C) III (D) IV
    Economic management
20. Q5 · 2024 QCAA · Paper 1 · 1 mark
    QUESTION 5 Which is an example of an automatic stabiliser? (A) infrastructure expenditure (B) electric vehicle subsidies (C) unemployment benefits (D) veteran payments
    Economic management
21. Q6 · 2024 QCAA · Paper 1 · 1 mark
    QUESTION 6 Which of the following is not an aim of microeconomic reform? (A) reducing unemployment in the short run (B) improving the productivity of sectors in the long run (C) enhancing the international competitiveness of targeted industries (D) changing the allocation of economic resources to specific industries
    Economic management
22. Q7 · 2024 QCAA · Paper 1 · 1 mark
    QUESTION 7 Ceteris paribus, a shift in the long run aggregate supply curve should occur when (A) household saving ratios fall. (B) average pension age decreases. (C) median household income increases. (D) worker productivity remains constant.
    Economic management
23. Q8 · 2024 QCAA · Paper 1 · 1 mark
    QUESTION 8 The Australian government is aiming to achieve sustainable budgets over time. Which factor makes this challenging? (A) heavy reliance on direct taxation (B) higher retirement age of employees (C) change in the demographic structure in the economy (D) greater infrastructure funding after national flood events
    Economic management
24. Q9 · 2024 QCAA · Paper 1 · 1 mark
    QUESTION 9 Assume the economy is at a trough position on the economic cycle. ECONOMIC UPDATE • A tighter overseas monetary policy is expected to contribute to weaker global GDP growth. • International supply chain delays are reducing. • The university sector is moving to online teaching to reach international students. What should the monetary policy stan…
    Economic management