BAULKHAM HILLS HIGH SCHOOL

HIGHER SCHOOL CERTIFICATE

2020 TOPIC TEST

Economics
General  Reading time – 5 minutes
Instructions  Working time – 2 hours
 Write using black pen
 Calculators approved by NESA may be used
 Write your student number and teacher’s name on the
multiple choice answer sheet
 Submit all handwritten notes with this test

Total marks: Section I - 20 marks (pages 2-8)

70  Attempt Questions 1 – 20
 Allow 35 minutes for this section

Section II - 30 marks (pages 9-17)

 Attempt Questions 21- 23
 Allow about 50 minutes for this section

Section III - 20 marks (page 19)

 Attempt Question 24 or Question 25
 Allow about 35 minutes for this section
Question Mark
Multiple Choice Q1-20 / 20

Short Answer Q21 / 10

Short Answer Q22 / 10

Short Answer Q23 / 10

Extended Response Q24 or Q25 / 20

TOTAL / 70

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Section I

20 marks
Attempt Questions 1 – 20
Allow about 35 minutes for this section

Use the multiple- choice answer sheet for Questions 1-20

1. Which of the following is an example of a regional trade agreement?

A. WTO
B. CERTA
C. ASEAN
D. CHAFTA

2. What would most likely encourage the globalisation process in an economy?

A. High levels of foreign debt and an uneducated labour force

B. An abundance of natural resources and high levels of protection
C. Investment into transport infrastructure and highly regulated customs procedures
D. Government policies to address political corruption and becoming a member of the
WTO

3. The table shows selected data for an economy.

Components of National Income ($billion)

Imports Savings Investment Taxation Exports Government
Expenditure
75 50 40 60 60 85

Based on the information in the table, which of the following is correct?

A. There is a budget surplus

B. There is a trade deficit
C. Leakages are greater than injections
D. Injections are greater than leakages

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4. What is the most common way to measure economic growth for an economy?

A. GDP per capita

B. Real GDP per capita
C. Percentage changes to real GDP over a period
D. Percentage changes to nominal GDP over a period

5. Which of the following would be recorded as a credit in the capital account of Australia’s
balance of payments?

A. The sale of a patent for medical technology to France

B. The purchase of a Starbucks franchise license from the Unites States
C. Payment for foreign aid to assist Papua New Guinea to build a dam
D. The sale of gold reserves on global markets by the Reserve Bank of Australia

6. Which of the following is correct about the impacts of an import quota and a tariff?

Import Quota Tariff

A. Benefits consumer Does not benefit consumers
B. Direct cost to the government Is not a direct cost to the government
C. Decreases domestic production Increases domestic production
D. Does not generate tax revenue Does generate tax revenue

7. In 2020, one Australian dollar buys 0.60 US dollars. In 2021, one US dollar buys 1.80
Australian dollars.

Which statement is most correct?

A. The exchange is unchanged from 2020 to 2021

B. There will be lower imported inflation in 2021
C. There will be a short-term deterioration in the trade balance in 2021
D. There will be a short-term improvement in the trade balance in 2021

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8. Which of the following is an economic argument against protection?

A. Dumping is less likely to occur

B. Structural unemployment will increase
C. Prices will rise and contribute to higher inflation
D. There will be greater allocative efficiency in the economy

9. The table shows selected data for a hypothetical economy.

Year C ($bn) Y ($bn)

1 220 300
2 400 600

What is the new equilibrium level of income (Y) in Year 3 if investment decreases by
$50bn?

A. $125bn
B. $475bn
C. $683bn
D. $725bn

10. An economy has experienced average growth rates of 2-3% p.a. GDP in the last five years
and structural change has resulted in growth in the services sector.

Which of the following best describes this economy?

A. Developed
B. Developing
C. Emerging
D. Least developed

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11. The diagram shows the impact of a change in the quota for imported wine.

According to the diagram, what are the effects of a movement in the supply curve from S
to S1?

Quota Domestic producers

A. Increases Face more competition
B. Increases Face less competition
C. Decreases Face more competition
D. Decreases Face less competition

12. The table shows selected data for an economy.

Real GDP ($bn) Net foreign liabilities ($bn) Net foreign equity ($bn)
1,975 891 -252

What is the value of net foreign debt as a percentage of real GDP?

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 A. 12.8%
B. 32.4%
C. 45.1%
D. 57.9%

13. The table shows selected data for a hypothetical economy.

Country HDI Population National

(millions) Income
($ millions)
A 0.8 150 2000
B 0.7 100 1700

What of the following statements is the most correct?

A. Country A has less unemployment than Country B

B. Country A has more unemployment than Country B
C. Country A has a higher life expectancy and higher educational attainment than
Country B
D. Country A has a lower life expectancy and lower educational attainment than Country
B

14. The diagram shows the relationship between inflation and unemployment for a
hypothetical economy.

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 What would move the economy from A to B?

A. Increased income tax rates and decreased levels of interest rates

B. Increased savings rates and decreased level of exports
C. Decreased marginal propensities to consume and increased levels of investment
D. Decreased levels of government expenditure and decreased level of interest rates

15. Which of the following is a disadvantage of increased transnational corporations in the

global economy?

A. Potential disruptions to global supply chains increasing economic uncertainty

B. Less potential exploitation of labour and land resources in developing countries
C. Decreased volatility in global financial markets due to increased movement of funds
D. Reduced movement of profits to tax haven countries, increasing government tax
revenue

16. Which international organisation is instrumental in the development of the Sustainable

Development Goals?

A. the G20
B. the OECD
C. the World Bank
D. the United Nations

17. The table shows selected data for a hypothetical economy.

Year Export Price Index Import Price Index TWI

1 100 100 60
2 105 110 58
3 115 116 56

Which of the following is correct for this economy?

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 Terms of Trade International competitiveness
A Improved in Year 2 Improved in Year 2
.
B. Deteriorated in Year 2 Decreased in Year 2
C. Improved in Year 3 Improved in Year 3
D Deteriorated in Year 3 Decreased in Year 3
.

18. Australia is a member of which of the following groups?

A. G8
B. EU
C. ASEAN
D. CPTPP

19. The equilibrium level of national income increases by $40 000 when investment increases
by $10 000. What is the marginal propensity to consume?

A. 0.2
B. 0.25
C. 0.75
D. 0.8

20. The diagram shows the impact of the removal of a subsidy paid to domestic producers of
cheese.
Assume that the equilibrium price of cheese with the subsidy was $20 per kilogram of cheese.

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 What are the impacts of the change in the subsidy?

Change in Change in
Domestic Producer Revenue Government expenditure
A. 0 Decreased by $2 000
B. 1000 Increased by $2 000
C. 0 Decreased by $10 000
D. -1000 Decreased by $10 000

End of Section I

BAULKHAM HILLS HIGH SCHOOL

HIGHER SCHOOL CERTIFICATE

9
2020 TOPIC TEST

Economics
Section II Answer Booklet

30 Marks
Attempt Questions 21-23
Allow about 50 minutes for this section

Instructions  Answer the question in the spaces provided. These spaces provide guidance
for the expected length of your response.
 Extra writing space is provided on pages 16-17.
If you use this space, clearly indicate which question you are answering.

Please turn over

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Question 21 (10 marks)
Marks

The diagram shows movements in the Australian dollar against the US dollar.

(a) Outline TWO reasons for the shift in demand for the Australian dollar in the diagram.
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(b) Explain ONE way the Reserve Bank could influence the value of the $A.
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Question 21 continues on page 11

Question 21 (continued)

Marks

(c) Analyse the impacts of a depreciation of the Australian dollar on the Australian economy.
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End of Question 21

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Question 22 (10 marks)
Marks

(a) Compare and contrast the roles of the World Trade Organisation and the International
Monetary Fund in promoting globalisation.
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Question 22 continues on page 13

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Question 22 (continued)
Marks

(b) Evaluate the impact of globalisation on the quality of life in an economy other than
Australia.
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Selected economy: _____________________________________________

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End of Question 22

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Question 23 (10 marks)

Marks

The table shows selected data for an economy that uses a floating exchange rate system.

Balance of Payments items $ billion

Exports 98.5
Imports 84.6
Services credit 26.6
Services debits 26.5
Net primary income -12.1
Net secondary income -0.6
Capital Account -0.2
Financial Account ?

(a) Using the data in the table, calculate the balance on financial account for this economy.
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(b) Outline TWO factors that could increase a nation’s Current Account Surplus.
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Question 23 continues on page 15

Question 23 (continued)
Marks

(c) Explain effects of falling interest rates on Australia’s capital and financial account
and the net income balance.
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(d) Explain the conflict that exists when a government attempts to simultaneously achieve
economic growth and external stability.
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End of Question 23

Section II extra writing space

If you use this space, clearly indicate which question you are answering.

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Section II extra writing space

If you use this space, clearly indicate which question you are answering.

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BLANK PAGE

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BAULKHAM HILLS HIGH SCHOOL
HIGHER SCHOOL CERTIFICATE

2020 TOPIC TEST

ECONOMICS
Section III

20 Marks
Attempt Question 24 or Question 25
Allow about 35 minutes for this section

Answer the question in the writing booklet provided. Extra paper is available.
Clearly state the question attempted and complete Student Number and Teacher’s name on the
booklet.
___________________________________________________________________________
In your answer you will be assessed on how well you:
 demonstrate knowledge and understanding relevant to the question
 apply relevant economic information, terms, concepts, relationships and theory
 present a sustained, logical and cohesive response
___________________________________________________________________________

Question 24 (20 marks)

Discuss the effects of protectionist policies on the global economy.

OR

Question 25 (20 marks)

Discuss the effects of protectionist policies on the Australian economy.

End of paper

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BAULKHAM HILLS HIGH SCHOOL
HIGHER SCHOOL CERTIFICATE

2020 TOPIC TEST

Economics
SECTION I - ANSWER SHEET
Total marks (20)
Attempt Questions 1 –20
Allow about 35 minutes for this section

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