HSC Economics - Sample Trial Paper 3


Section I: Multiple Choice 1. The inability of the price mechanism to provide public goods is an example of which of the following?

A) Social costs B) Adverse spill overs C) Market failure D) Negative externalities

2. Which of the following is a possible cause of cost inflation?

A) Labour skill shortages B) A decrease in interest rates C) Changes to the Industrial Relations Commission D) A rise in the level of consumption spending

3. What would be the most appropriate macoeconomic policy mix for a country experiencing a recession?

A) Lower interest rates and higher income tax rates B) Lower interest rates and lower income tax rates C) Higher interest rates and higher income tax rates D) Higher interest rates and lower income tax rates

4. How would the schools fees paid by an overseas student studying for the HSC in a NSW school be recorded in the Balance of Payments?

A) As a services credit B) As a current transfer credit C) As an income credit D) As a capital account credit

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