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 5 of 8

1. Q11 · Original practice · 1 mark
   The diagram shows a change from E1 to E2. A likely cause is
   Macroeconomic objectives and theory
2. Q12 · Original practice · 1 mark
   On the supplied PPC, moving from B to A represents
   Macroeconomic objectives and theory
3. Q13 · Original practice · 1 mark
   Without a new government decision, unemployment-benefit payments rise during a downturn. This is an example of
   Economic management
4. Q14 · Original practice · 1 mark
   Which is a discretionary fiscal response to a recession?
   Economic management
5. Q15 · Original practice · 1 mark
   Two households pay the same $100 consumption tax. Their annual incomes are$20 000 and…
   Economic management
6. Q16 · Original practice · 1 mark
   Which government outlay is a transfer payment?
   Economic management
7. Q17 · Original practice · 1 mark
   A budget remains in deficit after the effects of the economic cycle have been removed. This indicates
   Economic management
8. Q18 · Original practice · 1 mark
   The construction of a government-owned rail line is generally classified as
   Economic management
9. Q19 · Original practice · 1 mark
   The cash rate is the interest rate on
   Economic management
10. Q20 · Original practice · 1 mark
    Assume a cash-rate increase contributes to an appreciation of the Australian dollar. The exchange-rate channel can reduce inflation because
    Economic management
11. Q21 · Original practice · 1 mark
    A rate rise increases a household’s mortgage interest bill by…
    Economic management
12. Q22 · Original practice · 1 mark
    Lower interest rates raise housing values. Owners feel wealthier and increase spending even though current wages are unchanged. This illustrates the
    Economic management
13. Q23 · Original practice · 1 mark
    If households expect prices to rise rapidly next year, they may bring purchases forward. Initially, this can
    Macroeconomic objectives and theory
14. Q24 · Original practice · 1 mark
    A household has a fixed mortgage rate for another 18 months. A higher cash rate will
    Economic management
15. Q25 · Original practice · 1 mark
    Which best explains an implementation lag in fiscal policy?
    Economic management
16. Q26 · Original practice · 1 mark
    A successful skills program raises the productivity of workers. Its main long-term supply-side effect is
    Economic management
17. Q27 · Original practice · 1 mark
    When the economy is already close to capacity, a large construction stimulus may be less effective at raising real output because
    Economic management
18. Q28 · Original practice · 1 mark
    Real GDP rises by 3% while population rises by 4%. Real GDP per capita
    Macroeconomic objectives and theory
19. Q29 · Original practice · 1 mark
    Which reform most directly improves the competitiveness of domestic production?
    Economic management
20. Q30 · Original practice · 1 mark
    Following a temporary negative supply shock, tightening monetary policy creates a short-term trade-off because it can
    Economic management
21. Q31 · Original practice · 4 marks
    Use the data to calculate real GDP in each year and its percentage change. Explain why nominal growth gives a different impression.
    Macroeconomic objectives and theory
22. Q32 · Original practice · 4 marks
    A worker’s weekly wage rises from $1250 to$1312.50. Over the same period the CPI rises from 125 to 130. Calculate the percentage change in real wages, using the ratio method. Explain the result.
    Macroeconomic objectives and theory
23. Q33 · Original practice · 4 marks
    Calculate annual inflation in Years 2 and 3. Explain whether Year 3 represents deflation or disinflation.
    Macroeconomic objectives and theory
24. Q34 · Original practice · 5 marks
    In a simple closed economy without taxation, household disposable income rises by $200 million and consumption rises by$150 million. Calculate MPC, MPS and the multiplier. Estimate the final income increase from an additional autonomous…
    Macroeconomic objectives and theory