SCSA Economics Economic skills
5 sample questions with marking guides and sample answers · Avg. score: 25%
As a percentage of GDP, Australia's total imports plus total exports, is approximately
75%.
45%.
25%.
5%.
The table below shows the production of beef and corn in two countries.
| Beef | Corn | ||
|---|---|---|---|
| Country A | 5000 | or | 5000 |
| Country B | 2000 | or | 4000 |
Based on the information in the table, what is the opportunity cost of Country B producing one extra unit of corn?
1 unit of beef
2 units of beef
0.5 units of beef
1 unit of corn
The economic indicators in the table below refer to a hypothetical economy.
| Economic indicator | 2020 | 2021 | 2022 |
|---|---|---|---|
| Change in real GDP | 1.2% | 1.4% | 1.8% |
| Consumer price index | 3% | 4% | 1.9% |
| Unemployment rate | 7.5% | 5.5% | 5.1% |
| Balance on goods and services | ＄60bn | ＄80bn | ＄120bn |
| Net income balance | ＄20bn | –＄25bn | –＄30bn |
| Cash rate | 0.5% | 0.25% | 0.25% |
Identify the phase of the business cycle the economy experienced between 2020 and 2022.
Calculate the current account balance for 2022.
Describe two possible causes of the phase of the business cycle identified in part (a)(i) above.
Assume that the economic indicators for 2022 shown in the table on page 14 applied to the Australian economy.
Using the aggregate expenditure (AE) model, demonstrate the likely stance the Reserve Bank of Australia would adopt in order to influence economic activity, and explain the impact of this stance.
This question refers to the edited extract below, which is from an article by Matthew Doran and published on 15 November, 2020.
Australia signs Regional Comprehensive Economic Partnership, the world's largest trade deal.
The largest trade deal in history has been signed, with 15 countries including Australia agreeing to the trade deal covering 30 per cent of the global economy. Leaders agreed to the terms on the Regional Comprehensive Economic Partnership (RCEP) at the Association of South-East Asian Nations (ASEAN) summit in Bangkok last year. The countries involved are Australia, China, Japan, South Korea, New Zealand and the 10 members of ASEAN, including Indonesia and Vietnam.
Senator Birmingham said, “The real benefits are two-fold – one is our farmers and exporters, will get a more common set of rules across all nations. The other is our services export industry will get new access across financial, banking, aged care, health care, education and other service industries, such as the provision of architectural, engineering or planning services.”
The focus of RCEP is on standardising trade rules across countries, making it easier for people to do business. India has been negotiating during the eight years of talks, before pulling out last year. “That diminishes some of the value for Australia, as India would’ve been the one RCEP partner with whom we did not previously have any type of free trade agreement,” Senator Birmingham said. “However, the value of RCEP is still there.” The deal also does not include the United States, despite the country having US＄2 trillion (A＄2.7 trillion) in trade with the countries which are involved.
List one benefit for Australian exporters from belonging to the RCEP.
According to the article, which two countries are currently not members of RCEP?
Describe two arguments for trade liberalisation.
Using a demand and supply model, illustrate and explain the effects on consumers and producers of a country imposing a tariff on an imported good.
The table below shows the production possibilities of coal and iron ore in two countries.
| Coal (tonnes) | Iron ore (tonnes) | ||
|---|---|---|---|
| Country A | 50 | or | 100 |
| Country B | 80 | or | 320 |
According to the above table, country
B has a comparative advantage in producing coal.
A has an absolute advantage in producing iron ore.
B has a comparative advantage in producing iron ore.
A has a comparative advantage in producing iron ore.