Economics 2020 HSC exam pack

Students should:

• read the question carefully to ensure that they do not miss important components of the question
• have a clear understanding of key words in the question and recognise the intent of the question and its requirements
• use the first page of the answer booklet for an extended response to develop a plan to assist in the logical sequencing of information
• engage with what the question is asking rather than presenting a pre-prepared response
• relate to the question throughout the response rather than just at the beginning
• sustain their judgements, where appropriate, throughout the response with a clear connection to the question
• apply relevant economic information, terms, concepts, relationships and theory, where appropriate, to support their response
• present a sustained, logical and cohesive response that addresses the question where appropriate
• review their response to ensure that it addresses the question requirements.

Question 21

In better responses, students were able to:

• identify that the Gini coefficient is decreasing, leading to greater income equality (a)
• outline one negative impact on developing economies signing a Free Trade Agreement with advanced economies in a concise manner (b)
• describe in general terms how the World Bank can assist developing economies such as, improvements in health care and education (c)
• explain clearly TWO reasons why an economy can grow and yet have no impact on economic development (d)
• refer to examples of the negative effects of economic growth such as, rising income inequality and environmental degradation (d).

Areas for students to improve include:

• not confusing economic growth with economic development (a)
• correct reference to the data given (a)
• show how this disadvantage could emerge, for example, the reasons that infant industries suffer (b)
• not confusing the World Bank with the International Monetary Fund (c)
• identifying factors without clearly explaining their impact on economic development (d)
• relating the answer specifically to the question (d)

Question 22

In better responses, students were able to:

• identify clear differences in the meaning of terms (a)
• engage with what the question is specifically asking rather than writing generally about concepts (b and c)
• apply relevant economic evidence, for example, data, theory to support their response (b and c).

Areas for students to improve include:

• knowing the difference between cyclical and structural unemployment (a)
• answering the question that is asked (b)
• showing logical links between economic concepts (b and c)
• using relevant examples to support their response (c).

Question 23

In better responses, students were able to:

• demonstrate an understanding of one reason for the protection of domestic industries such as protection of infant industries, protection of domestic employment and prevention of dumping (a)
• correctly draw a new supply curve that reflected the introduction of the subsidy in the sugar industry, with the effect of that subsidy eliminating all imports (b)
• provide clear and detailed points for and/or against Australia’s involvement in one bilateral trade agreement. The specifics of the agreement were recognised and how it has impacted Australia’s trading relationship with the country involved, using statistics to show changes where appropriate (c).

Areas for students to improve include:

• providing a specific economic reason for protection or at least making it clear that there is an understanding of a reason not just defining protection in a general sense (a)
• understanding where to draw the supply curve shift so as to eliminate the imports (b)
• providing more than just a description of an agreement, sometimes mentioning a few goods or services that are traded between the countries. Students need to actually show that there was an agreement and how the agreement impacted on Australia’s trade with that country since the agreement was reached (c).

Question 24

In better responses, students were able to:

• clearly describe a relationship between Market- Exchange Rate (MER) and aggregate supply, using terms such as dynamic, allocative and technical efficiencies (a)
• correctly identify a product market (b)
• give a thorough explanation of the relevant MER and corresponding increases in efficiencies with reference to a specific product market (b)
• demonstrate a thorough explanation of how MER in the labour market lowers cost inflation (c)
• explains the impact of productivity on cost inflation (c).

Areas for students to improve include:

• describe the relationship between MER and aggregate supply rather than just defining them (a)
• identify a product market (b)
• link MER to increasing efficiency (b)
• explain how labour market reform impacts cost inflation (c)
• succinctly answering the question rather than just describing elements of labour market reform (c).

Question 25

In better responses, students were able to:

• identify the components of external stability
• explain the impacts of appreciating AUD on key components, balance of goods and services (BOGS), net primary income (NPY), Current Account Deficit (CAD)/ Current Account Surplus (CAS)
• explain impacts of depreciating AUD on the key components of BOGS, NPY, CAD/CAS
• provide a clear explanation of valuation effect and debt servicing
• make well informed judgements about impacts on eternal stability.

Areas for students to improve include:

• unpacking the question correctly in that it focuses on the impacts of exchange rate fluctuations rather than the causes of exchange rate fluctuations
• understanding the differences between export prices relative to import prices (Terms of Trade) as opposed to the price of the currency (exchange rate)
• increasing the depth in the explanation of an impact in the components that relate to external stability.
• making the assessment/judgement explicit.

Question 26

In better responses, students were able to:

• demonstrate knowledge of a range of environmental policies (market-based, targets, regulations) and international agreements
• use economic theory such as, externalities and Kuznets turning point to support their judgements
• integrate the stimulus material and extensive, detailed examples to inform their judgements
• inform their judgements through the use of statistics and policy limitations.

Areas for students to improve include:

• knowledge of specific government policies for the environment
• understanding of the structural government agenda concerning the environment
• use of economic models such as, externalities and trade-offs to explain the operations of government policies.

Question 27

In better responses, students were able to:

• demonstrate well-informed judgements about the effectiveness of macroeconomic policies in achieving both economic growth and full employment consistently throughout their response
• support their judgements with contemporary evidence such as, trends, data and comparative economic examples.

Areas for students to improve include:

• demonstrating a clear understanding of full employment rather than unemployment.
• making judgements about the effectiveness of macroeconomic policies using supporting evidence rather than simply demonstrating an understanding of the mechanisms of macroeconomic policies.

Question 28

In better responses, students were able to:

• identify the limitations of economic policies
• explain how conflicts between conflicting objectives pose limitations on the achievement of economic growth and distribution of income
• provide an informed judgement on the extent of any limitations of economic policies on the achievement of economic growth and distribution of income
• distinguish between the differences in limitations between macroeconomic and microeconomic policies
• apply theoretical limitations to the circumstances surrounding contemporary economic policy management in Australia
• provide illustrative examples and relevant data from the Australian economy to support their arguments.

Areas for students to improve include:

• structuring their responses coherently around clear topic statements based upon economic policy limitations
• avoiding excessive use of general comments about current economic conditions and peripheral theoretical analysis
• elaborating upon the nature and effect of the limitations with more specific information.