HSC Economics - Sample Paper 5


Section I: Multiple Choice 1. Which of the following best describes the difference between monetary policy and fiscal policy

A) Monetary policy is quicker to implement but has a longer time lag than fiscal policy B) Monetary policy is slower to implement but has a longer time lag than fiscal policy C) Monetary policy is slower to implement but has a shorter time lag than fiscal policy D) Monetary policy is quicker to implement but has a shorter time lag than fiscal policy 2. Other things being equal, what would improve an economy’s terms of trade?

B) A decrease in export prices and an increase in import prices C) An increase in the volume of exports and a decrease in the volume of imports D) A decrease in the volume of exports and an increase in the volume of imports

3. Which of the following could cause a decrease in hidden unemployment?

A) An increase in the general level of unemployment B) An increase in the level of cyclical unemployment C) An increase in the number of discouraged workers D) An increase in the labour force participation rate

4. Which of the following is a feature of a fully decentralised wage determination system?

A) Compulsory unionism B) Wage increases tied to inflation C) Increased role of industrial tribunals D) Negotiated workplace agreements

5. What is the likely impact of a decrease in the general level of tariffs in Australia?

A) Greater advantages for Australian producers in Australian markets B) Reduced advantages for Australian producers in overseas markets C) Greater advantages for overseas producers in Australian markets D) Reduced advantages for overseas producers in overseas markets

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