HSC Economics - Sample Trial Paper 2

Section I: Multiple Choice

1. What would be the effect on the Australian economy if all major trading partners experienced booms?

A) Higher economic growth and higher export volumes B) Higher economic growth and lower export volumes C) Lower economic growth and lower export volumes D) Lower economic growth and higher export volumes

2. The following diagram shows the demand and supply for Australian dollars in the foreign exchange market.

Which of the following could have caused the recent depreciation in the value of the Australian dollar?

A) An increase in the Australian interest rates due to the threat of inflation B) An increase in Australian exports due to China’s rapid growth C) A decrease in commodity imports as Australia’s growth slows D) A decrease in foreign investment in Australia due to the European debt crisis

3. Which of the following groups would benefit most during an inflationary period?

A) Import competing firms B) Export competing firms C) Fixed income earners D) Workers with limited wage power

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