VCAA Economics Domestic macroeconomic goals
5 sample questions with marking guides and sample answers · Avg. score: 66.7%
Ceteris paribus, a shift in the long run aggregate supply curve should occur when
household saving ratios fall.
average pension age decreases.
median household income increases.
worker productivity remains constant.
Which statement does not describe a relationship between an equitable distribution of income and economic growth?
Higher aggregate supply leads to greater equality of income over time.
Economic growth over time may reduce equality of income in market-based economies.
Income inequality lowers aggregate demand due to the different propensities to consume.
Some level of income inequality should encourage business investment and economic activity.
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.
Outline the economic policy objectives of the Australian Government and describe the extent to which these may conflict with or complement each other.
Outline the two methods used to measure productivity and, using an aggregate demand/aggregate supply (AD/AS) model, illustrate and explain the impact of productivity growth on the achievement of any three economic objectives.
Use the aggregate demand and aggregate supply (AD/AS) model to demonstrate and explain the characteristics of the boom phase of the business cycle.
Discuss how an economic boom influences the Australian Government's economic objectives of sustainable economic growth, low unemployment and a more equitable distribution of income.