Economics 2019 HSC exam pack

Students should:

• have a clear understanding of key words in the question and recognise their different requirements, such as, ‘evaluate’, ‘assess’ and ‘explain’
• read the question carefully to ensure that they do not miss important components of the question
• use a plan to guide the response
• sustain their judgements throughout the response rather than adding a sentence on judgement at the end of each paragraph
• use relevant economic terminology to support their judgement throughout their response
• draw theoretical graphs to emphasise relationships between variables
• support responses with relevant and contemporary examples and statistics
• engage with what the question is asking rather than presenting a pre-prepared response
• review syllabus content to ensure that the response is accurate and addresses syllabus requirements
• provide well organised, cohesive and sustained arguments throughout the response.

Question 21

In better responses, students were able to:

• clearly sketch a reason for an increase in the supply of Australian dollars (a)
• demonstrate a clear understanding of the weighted significance of Australia’s major trading partners and the relationship to movements in the Trade Weighted Index and United States dollar (b)
• demonstrate a clear understanding of the effects of a depreciation on the current account and the capital and financial account in the balance of payments (c).

Areas for students to improve include:

• interpreting stimulus correctly (a)
• providing clear definitions of Trade Weighted Index and bilateral exchange rates (b)
• understanding of why the Trade Weighted Index might not move in the same direction as the bilateral rate (b)
• distinguishing between accounts and categories within accounts of the balance of payment (c)
• clearly linking the effects of a depreciation on categories within the current account Balance of Goods and Services and Net Income and the Capital and Financial Account (c).

Question 22

In better responses, students were able to:

• articulate a clear relationship between economic growth and economic development (a)
• clearly set out two reasons for differences in living standards between nations (b)
• connect the question to the specific syllabus section and give two distinctly different reasons for differences in living standards such as natural resource endowment, differences in infrastructure, government structure and policy, education levels, access to technology (b)
• carefully select only one policy from a case study country such as China, Brazil, Indonesia and address the response in terms of economic development and not economic growth (c)
• make an explicit statement of the effectiveness of the policy (c).

Areas for students to improve include:

• paying attention to the key words in the question, rather than just simply defining the terms economic growth and economic development (a)
• giving the required number of responses to the question, giving multiple reasons when only two are asked for leads to the response not answering any part in enough depth to access the higher mark ranges (b)
• ensuring the two reasons selected are sufficiently different that they do not blend into only one response (b)
• more careful selection of the country being used to respond to the question because choosing countries such as United States of America, Canada, England, New Zealand or Norway made it more difficult to access the higher mark ranges (c)
• ensuring a clear understanding of the distinction and differences between the terms economic growth and economic development (c).

Question 23

In better responses, students were able to:

• make a clear link between ecological sustainable development and increasing costs. For example, increasing costs of production leading to increased prices, or increasing costs due to increased government regulation, or increasing costs to an economy in the form of increased structural unemployment due to the closing down of carbon emitting producers (a)
• make the link between a characteristic of a public good (non rivalry) and decreased utility/enjoyment of a beach on a crowded day, that is, the beach being rival in consumption (b)
• show an understanding that the price mechanism only takes into account the transaction of private costs and benefits and does not account for the wider social costs, for example, air pollution or traffic congestion (c)
• demonstrate a clear understanding of how market-based policies use the market mechanism to establish a price, create an incentive and therefore influence the behaviour of firm and consumers. Through the use of a market based example, (a carbon tax, cap and trade or subsidies), students explained the theory of markets showing the connection between price and supply, adoption of more efficient production methods (green technology, for example solar) that decrease carbon emissions (d).

Areas for students to improve include:

• providing more detail in the cost associated with achieving ecological sustainable development (a)
• develop understanding of market-based policies, in particular, the effects that price changes, through taxes or subsidies, have on supply and demand, and therefore environmental sustainable development (d). 

Question 24

In better responses, students were able to:

• calculate the rate of inflation correctly, from the information provided in the table using the Consumer Price Index (a)
• justify the appropriate stance and able to support it as well (b)
• interpret data from the table and work out the stance (b)
• explain the limitations and justify why they are limitations of monetary policy for economic management (c)
• support their arguments using appropriate scenarios of the current economic situation in Australia (c).

Areas for students to improve include:

• using the formula correctly to calculate the rate of inflation and using the Consumer Price Index to calculate inflation (a)
• having a clear structure in their response and answering what the question is asking (b)
• providing arguments based on the changes evident in the table to identify the stance, rather that rewriting or describing the table (b).

Question 25

In better responses, students were able to:

• interpret the relevance of the stimulus and engage with it in a meaningful manner
• identify that sustained budget deficits had a generally positive effect on economic growth in the short-term and a generally negative effect in the longer-term, while they had a generally negative effect on external stability
• demonstrate an understanding of the effect of sustained budget deficits on the components of aggregate demand, that is, Consumption + Investment + Government Spending + Exports - Imports
• demonstrate an understanding of how financing sustained budget deficits affected external stability with reference to appropriate measures such as the Current Account Deficit as a proportion of gross domestic product
• explicitly stated the relationship between government borrowing from overseas and the key Balance of Payments categories
• provide illustrative examples and relevant data from the Australian economy to support their arguments.

Areas for students to improve include:

• interpreting the stimulus rather than simply re-stating it
• avoiding general comments about current economic conditions
• using information from past budget deficits instead of referring to information from the current budget, which is a projected surplus.

Question 26

In better responses, students were able to:

• provide substantial links of the effects of microeconomic policies on employment and inflation in the Australian economy
• synthesise their own knowledge from the information provided to support their arguments
• demonstrate knowledge and understanding of microeconomic policies and how they contributed to both lower employment and inflation rates – examples include the deregulation of financial markets, the floating of the Australian dollar, the National Competition Policy, labour market reform, deregulation of the telecommunications and airline industry, and more recent microeconomic policies promoted in recent Federal budgets to encourage long-term productivity and efficiency
• demonstrate the impact of microeconomic policies with respect to both unemployment and inflation, while also acknowledging the role of microeconomic reform in encouraging greater overall efficiencies in the Australian economy
• integrate relevant economic terms, concepts, relationships and theory to develop a sustained and cohesive response. Relevant economic terms, concepts and theories include aggregate demand/aggregate supply, Non-Accelerating Inflation Rate of Unemployment, Okun’s Law, labour productivity, long-run Phillips Curve, financial market deregulation and tariff reform.

Areas for students to improve include:

• provide clear link between microeconomic policy and the reasons for the impacts on employment and inflation
• integrating their own knowledge and the information provided to support their arguments of microeconomic policies and its impact on employment and inflation. Students need to create greater understanding of the stimulus and integrate it into their response
• integrating economic terminology into their discussion by doing more than simply defining terms
• demonstrating a deeper understanding of the underlying concept through contemporary examples.

Question 27

In better responses, students were able to:

• clearly focus on the question, for example, accuracy of definitions, terminology and constant reference to the concepts in the question
• provide a clear and comprehensive explanation of inequality by providing supporting evidence, for example, through integrating relevant data / statistics and real life causes including structural changes in the economy such as the casualisation of the labour force and rise of the services industry, slow wages growth, 2019-2020 Budget, housing market and the commodity market
• integrate relevant economic terms and concepts into a coherent explanation of the causes and effects of income and wealth inequality, for example, the examination of labour market decentralisation including enterprise bargaining, demographic features of inequality such as age, gender, education and occupation, fiscal policy, superannuation and monetary policy.

Areas for students to improve include:

• the integration of correct and relevant data and statistics from real life / contemporary events
• the integration of a broader range of relevant economic terminology, concepts and theories in order to develop a meaningful argument that is relevant to the topic
• the integration of well annotated diagrams and/or theories need to be referred to in-text rather than drawn and not explained
• attempting to separate the terminology into ‘income distribution’ and ‘wealth distribution’.

Question 28

In better responses, students were able to:

• demonstrate knowledge and understanding of a range of protectionist policies implemented by Australia and other economies, including a comprehensive understanding of both decreases and increases of protection / free trade at the domestic and global levels
• demonstrate a clear and comprehensive understanding of a range of effects of protectionist policies on both the Australian and global economy, including the effects of unilateral, bilateral and multilateral trade and protection policies, as well as trade blocs and the role of international organisations such as the World Trade Organisation
• integrate relevant economic terms, concepts, relationships and theory about protectionist policies and changes in the levels of protection, for example, students demonstrated a strong understanding of concepts such as comparative advantage, misallocation of resources, trade diversion, structural change and specialisation
• integrate relevant and accurate graphs, data and examples, such as the effects of the US-China Trade War were supported with a tariff graph and economic data / statistics
• demonstrate a clear understanding that protectionist policies affect trade, investment, financial and labour flows between economies which in turn can impact on other economic issues such as economic growth, development, unemployment, inflation and external stability.

Areas for students to improve include:

• demonstrating a stronger understanding of effects of protectionist policies on BOTH the Australian and global economy
• providing more than a description of the different types of protection
• addressing a broader range of effects on households, firms, government and economic issues on a domestic and global level.