Economics Headstart

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Overview
• Current economic news & HSC Economics
• Topic 1: The Global Economy revision
• Exam Tips, Tricks and skills!
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Overview
Overview of Topics
Overview Global Economy Protection Tips and Tricks Summary 6

Overview “Contemporary economic
understanding”
1. The Global Economy

“Explores globalisation and the impact of increased global
integration on individual economies and the global economy
at large. It explores the causes and effects of globalization,
both positive and negative”
2. Australia’s Place in the Global Economy

“Examine Australia’s involvement with the global economy,
and the effect of changes in the global economy on Australia.
You will also examine tools to measure this relationship”

Overview
3. Economic Issues
“Economic issues that face an economy, including their causes and consequences. This topic
also requires trend analysis of these issues in the Contemporary Australian economy.”
4. Economic Policies and their management

“Functions of economic policies in the Australian economy. The economic issues studied in
topic 3 are all related to the economic objectives in topic 4. Topic 4 focuses more on balancing
and achieving the optimal standards for each of these economic issues.”
TIP: It is possible to use notes from topic 3 to address economic objectives theory in topic 4.
Essay questions are commonly linked here

Overview
How to approach HSC Economics

understanding”
• Find your best study method: I preferred learning by reading and writing
my notes. Some people prefer doing practice papers, others learn by
making visual graphics etc.
• Understanding > memorising. Make an effort to think deeply about the

content you learn, form your own judgements in class and engage in
discussion. Be inquisitive, form your own judgement and read beyond
the textbook.
• ‘Contemporary Economic Issues’: statistics, case studies, trends
• Collate important statistics in a form easy to memorise: graphic, doc etc.
• Become familiar with your syllabus + write essay plans

Overview
Current economic news & HSC

Economics

understanding”
Do I need to read the news?
• In longer response questions, you MUST include examples to back up your theory
• Similar to using quotes in English
• 10 min a week
• Ross Gittins, Sydney Morning Herald, ABC News, Apple News app, SBS, RBA
How current do my statistics need to be?

• You don’t need to know statistics pre-1990s
• You should avoid giving ‘current’ examples from pre-2018, unless you have no other choice
• 2019/2020 is generally accepted as ‘current’
• HSC paper is written around the middle of each year, they won’t expect all statistics to be
super recent
• Statistics you must update: Cash rate, economic growth rate, $US/AUD... (RBA snapshot)
How can I remember it all?

• Tie in with theory
• Colour differently to notes
• Summary tables & graphs: Mining boom, GFC, Current

Overview How will COVID-19 impact your
What has COVID caused economically?
economic analysis?
• Going into 2020, Australia had worsening economic performance, without

considering the risks of COVID-19
• Worst performance since the GFC: weak spending and investment, economic
growth forecasts repeatedly cut by Treasurer
• $320 billion+ to compact economic impact of coronavirus pandemic - “the

biggest economic lifeline in Australia’s history” according to then PM Scott
Morrison.
• Stimulus represents 16.4% GDP, supporting 6 million workers and around half
the Australian workforce

economic analysis?
The economy entered a RECESSION (negative economic growth)
contributed largely by:
• Fall in consumer spending (0.6%)
• Fall in investment by (0.8%)
Economist David Bassanese of BetaShares: “Let’s not forget the economy

was already struggling before the virus crisis due to a downturn in
housing construction, weak business investment and tapped out
consumer spending. Those fundamental challenges have not gone away,
and the shock of COVID-19 has only exacerbated them.”
Approx. 20-30% of your study of economic news may be about COVID…

Other events are of equal importance!

economic analysis?
• 5x faster recovery than 1990s recession
• Australia's health and economic outcomes compare favourably to international peers. Our
economy outperformed all major advanced economies in 2020 and our labour market
continues to recover quickly. Compared to major advanced economies, Australia is the first
economy to have seen hours worked and employment recover to pre-pandemic levels.
• The outlook for the global economy has strengthened and global GDP is forecast to grow by
6 per cent in 2021, building on the recovery that began across the latter part of last year.
• Australia’s major trading partners are forecast to grow by 6½ per cent in 2021, more quickly
than the global economy.

Overview Other Indicators
(RBA, 2023) as at 3 August

The Global Economy
Topic 1:
The Global Economy

The Global Economy
International Economic
Integration

The Global Economy The Global Economy + Gross
World Product (GWP)
•Global economy: refers to the increased integration between economies of the world
•Economic integration: liberalisation of trade between two or more countries
•Financial contagion: news of an economic disaster resulting in financial traders moving

money out of affected or nearby areas/economies e.g. Europe
•Gross World Product: total value of goods/services that are produced worldwide over a
period of time, e.g. a year, measured in $USD for consistency
•GDP at PPP: total value of gross world product in a given time period, adjusted for national
variations in price and different exchange rates

The Global Economy The Global Economy + Gross
World Product (GWP)
• Advanced economies → 40% of world GDP at PPP, 14% of the

population (IMF world economic outlook 2019)
• China and India are emerging economies due to sustained rapid

growth
• Emerging/developing economies → 60% of world GDP at PPP,

86% of population (IMF world economic outlook 2019)
• A relatively smaller number of advanced economies dominate

global production, compared to the larger number of emerging and
developing economies

The Global Economy Globalisation
Globalisation:
integration and removal of barriers between countries/economies

Forces driving globalisation (World Bank)
• New markets: growing global markets in services such as finance,

insurance, transport, deregulated financial markets and antitrust laws
(increased competition)
• New actors: MNCs → dominating world production through global supply

chains, WTO → govern free and fair trade, NGOs → foreign aid, regional
trade blocs increasing such as the EU and policy co-ord groups e.g. G7,
OECD

Forces driving globalisation (World Bank)
• New rules and norms: market-based economic policies spreading,

democracy growing, human rights awareness increasing, action
agendas for developing countries, multilateral agreements and
conventions to protect the world
• New tools of communication: internet and electronic communications

linking people simultaneously → widespread usage of personal devices,
internet, digital media and transport → increased trade, communication
and speed

The Global Economy Trade in goods and services
• Trade in goods/services → increased dramatically in the last few

decades from 38% of global output in 1990 to 50% of global output
in 2018
Factors that have strongly promoted globalisation:
• Trade agreements between countries
• Domestic deregulation → removal of rules and laws
• New technology in transport and communication
• Australia has reduced tariffs to a record low of 2.23%, in 2018

The Global Economy Trade in goods and services
• Two of the main ways that Australia has promoted free trade are:
• Bilateral agreements: between two countries e.g. Australia and the
USA
• Multilateral agreements: across regions such as Asia or the Pacific

e.g. APEC
• The composition of global trade is continually changing due to demand of

different or newer goods and services, the rise in incomes and new
technologies
• The direction of trade flows has changed due to changes in the

importance of regions Trade flows have increased significantly for
emerging economies; 7-19% between 1995 - 2015.

The Global Economy Financial flows
• Finance: is the most globalised feature of the world economy because

everything revolves around money → move instantly between countries
e.g. ATMs, credit cards
• Main drivers of global financial flows:

• Financial deregulation, which began in the 1970’s and 1980’s
• Speculators: investors who buy or sell financial assets with the aim
of making profits from short term price movements → creates
excessive volatility
• Foreign exchange daily turnover $4 trillion (2010) to $6.6 trillion

(2020), causing a 40% increase in trading volume over the past
decade

The Global Economy Financial flows
• An important feature of financial flows are the foreign exchange

markets which are networks of buyers and sellers exchanging
currencies
• The main benefit is that it enables countries to obtain greater

investment finance
• The GFC led to fall in activity in financial markets due to the increased
risk aversion of lenders, higher cost of credit and increased volatility
• Total activity on global capital markets fell by approx US $1000 billion

from 2008 to 2009 due to the GFC

The Global Economy Investment & Transnational
Corporations
• Investment: international businesses (TNCs) operating in several
countries in the hope of making a profit.
• Foreign direct investment (FDI): purchase a controlling interest in a

foreign subsidiary (over 10%)
• The global expansion of manufacturing, for instance, takes advantage of

the low labour costs and the cheaper resources around the world
• Easing capital controls and financial deregulation has caused FDI’s in

2015 to increase to 6x their level in 1995
• Main drivers of foreign direct investment:

• Government policies that attempt to encourage FDI
• Migration laws that encourage international labour mobility

The Global Economy Technology, transport and
communication
• Consumers are global; e-commerce and travel + shared tastes and
increased choice
• Firms are global; efficient inventory management, less waste, increased

competition and efficiency, reduce labour costs, improved
communication
• Technology diffusion: way in which technology spreads from one country

to another.
• Transport: transport infrastructure includes roads, railways, airports and

the services that flow from it etc. → important for movement of resources
• Communications: growth in telecommunications has resulted in the rapid

spread of information and communications technologies → increase
efficiency

The Global Economy Technology, transport and
communication
For example…
The introduction of 5G networks is set to increase global GDP as it

facilitates faster mobile connectivity and continues to drive gains in
productivity and efficiency. In 2016, mobile technologies generated
4.4% of GDP globally, which is estimated to grow to 4.9% in 2020.

The Global Economy International division of labour,
migration
•International division of labour: tasks are allocated to different people in
different countries. It includes:
• MNCs establishing manufacturing plants/outsourcing in emerging
economies to utilise cheap unskilled labour
• Geographical mobility and migration of all workers to developed
economies
•Immigration laws around the world generally restrict lower-skilled workers

from moving to other countries
•Australia’s major intake of migration is in the category ‘skilled migration’.

•3% of the world population have migrated to work in different countries
(World Bank)
•Human capital flows towards advanced economies due to increased

opportunity → increased technological gap between developed and developing

The Global Economy International and regional
business cycle
• International business cycle: refers to the changes in world
output/economic activity
• Changes in the international business cycle have varying effects on

domestic business cycles, depending on the level of a country’s
internationalisation + integration
• Regional business cycle: refers to the fluctuations in the level of economic

activity in a geographical region of the global economy over time e.g. EU
• Regional business cycles can be different to international business cycles
• Research by the RBA shows that 63% of changes in output in Australia

has been due to changes in interest rate growth levels and inflation from
the G7.

The Global Economy International and regional
business cycle
Factors that strengthen the Factors that weaken the international

international business cycle business cycle
• Trade flows: reduced trade barriers • Domestic interest rates: contagion

• Financial flows: deregulation, forex • Government fiscal policies: taxes
• Investment flows: increased TNC’s decrease spending
and FDI • Exchange rates: fluctuations can be
• Technology: improved transport and unfavourable
communication • Structural factors: influence
• Global interest rates: contagion competitiveness of the economy

The Global Economy Practice Question
1.Which of the following is most likely to be of benefit to transnational

corporations?
a) Increased trade barriers

B) Variations in regional business cycles
C) Restrictions on international financial flows
D) Migration laws that encourage international labour mobility
2017 HSC

The Global Economy Practice Question
1.Which of the following is most likely to be of benefit to

transnational corporations?
a) Increased trade barriers

B) Variations in regional business cycles
C) Restrictions on international financial flows
D) Migration laws that encourage international labour mobility
2017 HSC

The Global Economy
Trade, Financial Flows

and Foreign Investment

The Global Economy The basis of free trade:
advantages and disadvantages
• Free trade: occurs when there are limited artificial barriers imposed by
the government upon the flow of goods/services across international
borders
• Absolute advantage: is when a country can produce more output with the
same resources as another country
• Comparative advantage: is when a country has a lower opportunity cost

when producing a good → efficient use of resources.

The Global Economy Free trade: advantages and
disadvantages
Advantages Disadvantages
• Greater variety of goods/services • Increase in unemployment, hard to
• Allows countries to specialise → compete with imports.
efficient allocation of resources • Difficult to establish new businesses if
• Economies of scale → increasing not protected
efficiency and productivity • Dumped surplus production on the
• Improve international competitiveness domestic market
• Encourages innovation and spread of • Negative externalities (environment
new technology and labour exploitation
• Higher living standards as a result of • Narrow export base - increased
lower prices independence
• Possible CAD issues

The Global Economy Role of international
organisations
Global organisations that promote international policy coordination; forum for
issues and disputes
• World Trade Organisation (WTO)

• International Monetary Fund (IMF)
• World Bank
• United Nations (UN)
• Organisation of Economic Cooperation and Development (OECD)
Government Economic Forums that influence/coordinate world trade and

economic policies
• G20
• G7

organisations
World Trade Organisation (WTO)
• WTO: main multilateral trade agreement, binding governments to keep trade policies
• It monitors developments in world trade and provides basic principles including:

• Trade liberalisation: eliminate trade barriers through multilateral negotiation
• Stability of trade relations: mediator to solve disputes
• Latest round of WTO trade negotiations → Doha Round (Nov 2011)

• Main aim was to reduce agricultural subsidies and for advanced economies to
grant developing countries more market access
• Progress was hindered by disagreements on access to agricultural markets, and
arguments surrounding manufacturing protection
• Disagreements led to slow progress and the shift towards regional agreements

organisations
International Monetary Fund (IMF)
• IMF: international agency that oversees the stability of the global financial system
• Promote international monetary cooperation and exchange rate stability
• Facilitate expansion of international trade and multilateral payments system
• Give resources/funds to members experiencing BOP difficulties
• A country in severe financial trouble poses potential problems for the stability of the
international financial system which the IMF was created to protect.
• A pool of funds from advanced economies is used to support countries experiencing

short-term financial problems
• All of these loans need to be paid back to the IMF with (low) interest
• After the GFC, the IMF injected $US 250 billion into the economy to promote liquidity
and suspended interest payments on loans to help developing countries

organisations
World Bank
• World Bank: promote economic development in developing countries through

influencing macro and micro economic policy.
• The world bank aims to assist developing economies through providing:

• Development assistance (foreign aid) and loans
• Support long-term investment projects to encourage economic development
• Dispute settlements in investment projects e.g. between gov and firms
• Conditionality principle: IMF & World Bank usually require governments to

implement structural reforms in their economies to receive financial assistance
• Can be seen as undermining their national sovereignty and a loss of autonomy
• The World bank’s two major goals (2030) include:

• Reducing the rate of extreme poverty to less than 3% by 2030
• Reducing inequality by fostering income growth for the world’s bottom 40%

organisations
2017 HSC
21. (c) Compare and contrast the roles of the International Monetary Fund
(IMF) and the World Bank in international economic integration. (4 marks).

organisations
United Nations
• UN:
• Peacekeeping
• Conflict prevention
• Humanitarian assistance and human rights
• UN adopted the ‘2030 Agenda for Sustainable Development’ (Sep 2015) which
established goals and targets called the ‘Millennium Development Goals’
• First goal - “eradicate poverty and hunger” by halving those in extreme poverty
• People living off less than $1 a day decreased from 29-15% in 1990 - 2015

organisations
United Nations
• UN:
• Peacekeeping
• Conflict prevention
• Humanitarian assistance and human rights
• UN adopted the ‘2030 Agenda for Sustainable Development’ (Sep 2015) which
established goals and targets called the ‘Millennium Development Goals’
• First goal - “eradicate poverty and hunger” by halving those in extreme poverty
• People living off less than $1 a day decreased from 29-15% in 1990 - 2015

organisations
United Nations
• OECD:
• Engages in research, consultation and coordination of economic issues
• Promote sustainable economic growth and development
• Maintain financial stability
• Contribute to global economic development
• It publishes regular reports such as the OECD Economic Outlook on each member’s
economic performance and prospects
• It makes policy recommendations to improve the economic performance of its

member nations
• In 2016 it focused on unemployment in member countries and published the

Employment Outlook series

organisations
GOVERNMENT ECONOMIC FORUMS
G20
• Established after the GFC to coordinate a global response to avert a depression.

• Coordinate fiscal stimulus around the world
• Improve supervision of global financial system
• Discuss key issues in the global economy
• It came about because the G7 wasn't truly global
• Australia hosted the G20 meeting in Brisbane in 2014; agreed to lift growth by 2%
• Member countries of the G20 represent around 90% of global gross national product
and 80% of world trade

organisations
GOVERNMENT ECONOMIC FORUMS
G7
• G7 has been the unofficial forum for

• Coordinating global macroeconomic policy due to its influence over the fiscal
and monetary policies of the world’s largest economies.
• Significance of G7 has declines → shift from the global balance of power towards
emerging economies in particular China.
• The G7’s share of global GDP has shrunk from 68% in 1992 to 47% in 2015
• In 2008 they met in Washington DC to coordinate macroeconomic policies to
overcome the GFC, pledging over $1 trillion in loans and guarantees for the IMF

The Global Economy Trading blocs, monetary unions
and free trade agreements
• Trading bloc: countries enter preferential trade agreements - free trade between
themselves and external tariffs on imports from the rest of the world
• Beneficial if there is trade creation not trade diversion → comparative advantage
• Monetary unions: formed when groups of countries share a common currency,

monetary policy
• Free trade agreement: formal agreement between countries to reduce trade

barriers such as tariffs

• Increase in economic growth as • Trade diversion: global

countries sell more exports + economy may become divided
reduced costs along regional lines; trade with
non-members may decrease
• Promote closer political
relationships between countries


European Union (EU)
• EU: customs (trade) and monetary union, trading bloc and multilateral
agreement consisting of most European countries
• Creation of a single European market: common trade and migration
policies
• Single currency of the Euro managed by the European central bank
• 17% of the world market for exports - larger than China or US.
• The implications of this for non-members include high rates of protection for
agricultural goods → EU’s Common Agricultural Policy subsidies absorbed 38%
of its Budget in 2016

Asia Pacific Economic Cooperation (APEC)
• APEC: multilateral trade agreement

• Implement common trade policies
• Developed mechanisms for closer trade and investment links in Asia Pacific e.g.
dispute settlement procedures
• Non-discriminatory: APEC agreed not to become a protectionist trading bloc, but to

reduce barriers to non-member countries as well.
• It is very large and therefore significance of it as a trading bloc has declined.
• Even though APEC members account for approximately 40% of the world population they
account for 60% of world GDP and 47% of world trade.
• Target of “free trade” by 2020 under the Bogor Declaration but tariff levels within
countries have dropped from 20% to 13% in 1994 - 2016

North American Free Trade Agreement (NAFTA)
• NAFTA: multilateral free trade agreement consisting of Canada, Mexico and the
USA mainly based on eliminating agricultural protection and tariffs.
• US + Canada: opportunity to increase international competitiveness by
exploiting lower production costs in Mexico
• Mexico: greater access for its exports to the larger markets
• Trade diversion may have been created as there is an incentive for firms to
relocate production to Mexico and close manufacturing in Canada and the USA
• However, consumers have benefited from lower prices and US corporations

from the lower costs. NAFTA accounts for 13% of global merchandise trade.

North American Free Trade Agreement (NAFTA)
Following Donald Trump’s presidential election, the future of NAFTA became

uncertain. Renegotiation took place between 2017-2018, with the top priority being
to reduce the US’ trade deficit. The renegotiations were successful, and a preliminary
deal was reached, preserving the trilateral pact. The new name for the agreement is
the United States-Mexico-Canada Agreement (USMCA), ratified in March 2020,
replacing the goals of NAFTA.
This new agreement focuses largely on automobile and agricultural exports, increases
environmental and working regulation and incentivises more domestic production of
automobiles. Analysis of the new agreement reveals mixed effects on the economic
growth of member nations, but the International Trade Commission found the
agreement will increase GDP by 0.35% and jobs by 176,000 in the next 6 years.

Association of South-East Asian Nations (ASEAN)
• ASEAN: free trade area covers emerging and developing economies in South-East
Asia.
• Promotes economic development, social progress, and cultural development
• It has acted as a counterweight to the APEC forum, which tends to be dominated

by the large economies e.g. US and China.
• Aus and NZ joined in 2010 (ASEAN-Australia-New Zealand Free Trade Area) -

ASEAN nations committing to eliminating tariffs on 96% of Australian exports to
the region
• This is the largest preferential trade agreement that Australia has concluded
representing 20% of Australia’s trade in goods/services.

The Global Economy Bilateral trade agreements
• Slow progress in WTO negotiations led to the rapid growth in bilateral FTAs
• Closer Economic Relations Trade Agreement (CERTA):

• Led to the elimination of trade restrictions between Australia and New
Zealand
• Harmonisation of business regulations and tax law between them
• Reduce trade barriers more quickly • Trade diversion may occur, causing
than waiting for WTO inefficient allocation of resources
• More flexibility in conditions of • Undermine the ‘most favoured

agreement nation’ principle of WTO - equal
trade conditions for every member

Protection
Protection

Protection Protection
Protection:
use of artificial barriers which restrict the free flow of goods and
services in international trade, to give domestic producers an
artificial advantage

Protection Reasons for protection
• Infant industry argument - allowing newly established industries

sufficient time to achieve economies of scale to compete in global
markets and become efficient.
• Temporary; until they are internationally competitive → otherwise;
may result in inefficient resource allocation if firms become reliant
and don’t innovate
• Domestic employment - if overseas countries offer cheaper production,

then often domestic jobs are at risk, imposing tariffs and barriers
prevents job loss (recessions)
• However, may be at the expense of efficient export industries →
may raise exchange rate and affect export competitiveness and
TOT

Protection Reasons for protection
• Dumping - if a country has an oversupply of goods, it may dump excess

products at a very low price, damaging local businesses as they are unable
to compete
• The country may impose a quota to restrict the amount that can be
imported
• For example, Oxfam has called for the EU to review its Common
Agricultural Policy, which heavily subsidises agricultural production
and causes great excess production. Oxfam claim this is destroying
livelihoods of farmers in developing countries.
• Defence - defence of the nation (in the event of war) or defence of a

culture.
• It is a form of national security (especially during war) for countries to
have their own goods, including weapons, rather than rely on imports.

Protection Practice Question
2017 HSC
21. (a) Why can dumping be used as a justification for trade

protection? (2 marks)

Sample answer:
Dumping involves foreign goods being sold in the domestic market below
their cost of production which could have a negative impact on
competitive domestic firms.
Answers could include:

• Potentially higher future prices for consumers
• Dumping might drive out efficient local producers
• Potential for increased domestic unemployment
• Foreign governments subsidising producers.

Protection Method of protection: Tariffs
Tariff:
taxes on imported goods imposed for the purpose of protection
• Redistribution effect: stimulates • Price effect: may lead to imported
domestic production and inflation → loss in consumer’s real
employment, may increase wealth income due to higher prices
• Revenue effect: government gains • Reciprocity argument: retaliatory
revenue tariff on domestic exports, nullifying
• Consumption and protection effect: the positive effect of the initial
imports may decrease → improve protection
TOT, BOP and lower CAD

Protection Method of protection: Quotas
Quota: quantitative restriction on certain categories of imported

goods
Effects of quotas are like tariffs, except no government revenue is

generated

1. A government decides to reduce the import quotas for a product.

Other things being equal, which of the following is most likely to
occur in the domestic market.
A) The revenue of foreign producers will increase

B) The domestic price of the product will increase
C) Domestic firms will produce less of the product
D) The market share of foreign producers will increase
2017 HSC

1. A government decides to reduce the import quotas for a product.

Other things being equal, which of the following is most likely to
occur in the domestic market.
A) The revenue of foreign producers will increase

B) The domestic price of the product will increase
C) Domestic firms will produce less of the product
D) The market share of foreign producers will increase
2017 HSC

Protection Method of protection: Subsidy
Subsidies: financial assistance paid to domestic producers

such as farmers to allow them to increase supply and
compete internationally.
•Advantages of subsidy over •Distort resource allocation and

tariffs: redistribute income from
•Encourage domestic production, taxpayers → may increase tax
employment and exports burden, may be inefficient
•Price advantage for local •Direct costs on government
consumers → less inflationary budgets, instead of income
pressure
•Easier to remove than a tariff →
subject to regular reviews

Protection Method of protection: local
content rules & export incentives
Local content rules: specify that goods must contain a minimum percentage of
locally produced parts, or a proportion of goods in the market must be locally
made.
An example of an Australian local content rule is that all commercial, free-to-air

television licensees broadcast an annual minimum transmission quota of 55%
Australia programming between 6am and midnight. This protects Australia’s
dramatic and informative entertainment and culture.
Export incentives: give domestic producers assistance e.g. grants, loans or

technical advice to encourage businesses to penetrate global markets & expand
market share.
For example, Austrade’s Export Market Development Grands (EMGDs) reimburse

exporters for costs relating to the promotion of exports into new markets. Each
dollar spent generates $13.50 for $27 worth of exports.

Tip and Tricks
Approaching the HSC

Exam

Tip and Tricks Multiple Choice
Language:
Be extremely careful when reading questions.
Examiners are often tricky and change questions
slightly with words like ‘long-term impact and short-
term impact, high and low, hypothetical economy
and a specific economy, what would happen and
what is currently happening in the economy,
expenditure vs revenue’.

Common skills:
Questions students are often tripped up on involve
what can be considered to be commonly tested
economics skills e.g. calculating a CAD based on a
given table of values, calculating a multiplier value,
recognising the size of a tariff and subsidy.

Question 17, 18, 19 & 20 (back-end of the multiple

choice):
The Economics multiple choice exam is (mostly)

ordered in terms of difficulty. This can result in
students become less confident as they approach
those final questions. Don’t view these questions
differently from the others, know you have the
knowledge to find an answer and take your time to
think through a method to the solution. Practicing
more of these questions will definitely help build your
confidence here.

Tip and Tricks Short Answer
• A general tip is at least 1-2 sentences per mark (depending on

the NESA verb used). But I never counted my sentences in an
exam, it would be silly!
• A general layout you could remember for higher-order short
answer questions (perhaps those asking you to analyse,
discuss or even just explain) is to firstly define the key
economic term in the question. The take a moment to draw
connections in your mind between your knowledge and
formulate an argument that directly answers the question.
• Consider impacts on individuals, businesses and the
government
• Include diagrams and graphs in short answer responses to
assist your explanations

Tip and Tricks Essay Tips
• Always plan
• Complex sentences aren’t rewarded
• Clarity + use of syllabus terms
• Graphs
• Succinct but no slang
• THEORY VS FACT… words like ’may, might, could theoretically’
• Counter-arguments à 70% argue for, 30% argue against
• ‘However,…’
• Know NESA verb definitions
• Statistics: must not just state, ANALYSE! Treat like a quote from
English, follow a ‘PEEL’ method
• Wide reading quote

Tip and Tricks How to pick the right essay
question
• Read the essay questions FIRST, in reading time, then read the rest of the paper
• When you read over the rest of the paper, go back to the essays
• For some people, they feel more confident in certain areas à start by thinking
which you feel most confident in
• Then consider the following:

• Which can you brainstorm the most ideas for
• Which do you know more statistics about
• Which do you find more interesting
• Which lends itself more towards our contemporary economic climate
• Which do you think could be easier?
• BAND 6: Which relies LESS on strict theory, and more on ANALYSIS

Tip and Tricks Tips to Integrate Stimuli
• Highlight key words from the syllabus
• Highlight any information that directly references a specific

economic event, organization, forum etc.
• Is the stimulus dated? This could hint about which contemporary

economic statistics you will need to include in your response
• Treat the stimulus like quotes in English à use them to back up

your theory, answer the question more directly, and mention
content more relevant to what the marker is looking for
• Where is the stimulus from?

Tip and Tricks Example Essay Question
• Assess the effectiveness of monetary policy to manage price stability

and economic growth in Australia
• Theory: monetary policy, inflation, economic growth
• Directive: Assess the effectiveness

• Order your paragraphs and theory according to importance
• Make a judgement on the limitations and benefits of monetary
policy use
• Give reasons why and examples from Australian economic
events à statistics
• Draw out relationships between monetary policy + theory

• Assess the success of Fiscal policy and the recent

Australian Budget in managing full employment
and the distribution of income in the Australian
economy.

• Assess the success of Fiscal policy and the recent Australian Budget in managing full employment and the
distribution of income in the Australian economy.
• Plan
1. Budget outcomes & stances… (theory from fiscal policy)
2. 2019/20 Budget overview, employment and income trends
3. Unemployment + underutilisation of labour + budget specifics
4. Distribution of income and the budgetary effects + Lorenz curve
5. Overall analysis of success of budget
• Quotes from: ANU, AFR, IMF, SMH as wide reading. [Note: I ticked these off as I included them in the essay, as I
would tend to forget these].

THANK YOU!
81

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1

• Topic 1: The Global Economy revision

• Exam Tips, Tricks and skills!

Overview Global Economy Protection Tips and Tricks Summary 6

1. The Global Economy

2. Australia’s Place in the Global Economy

Overview Global Economy Protection Tips and Tricks Summary 7

4. Economic Policies and their management

Overview Global Economy Protection Tips and Tricks Summary 8

How to approach HSC Economics

Overview Global Economy Protection Tips and Tricks Summary 9

• Understanding > memorising. Make an effort to think deeply about the

• ‘Contemporary Economic Issues’: statistics, case studies, trends

• Collate important statistics in a form easy to memorise: graphic, doc etc.

• Become familiar with your syllabus + write essay plans

Overview Global Economy Protection Tips and Tricks Summary 10

Current economic news & HSC

Overview Global Economy Protection Tips and Tricks Summary 11

How current do my statistics need to be?

How can I remember it all?

Overview Global Economy Protection Tips and Tricks Summary 12

• Going into 2020, Australia had worsening economic performance, without

• $320 billion+ to compact economic impact of coronavirus pandemic - “the

Overview Global Economy Protection Tips and Tricks Summary 13

Economist David Bassanese of BetaShares: “Let’s not forget the economy

Approx. 20-30% of your study of economic news may be about COVID…

Overview Global Economy Protection Tips and Tricks Summary 14

Overview Global Economy Protection Tips and Tricks Summary 15

(RBA, 2023) as at 3 August

Overview Global Economy Protection Tips and Tricks Summary 16

Overview Global Economy Protection Tips and Tricks Summary 17

Overview Global Economy Protection Tips and Tricks Summary 18

•Economic integration: liberalisation of trade between two or more countries

•Financial contagion: news of an economic disaster resulting in financial traders moving

Overview Global Economy Protection Tips and Tricks Summary 19

• Advanced economies → 40% of world GDP at PPP, 14% of the

• China and India are emerging economies due to sustained rapid

• Emerging/developing economies → 60% of world GDP at PPP,

• A relatively smaller number of advanced economies dominate

Overview Global Economy Protection Tips and Tricks Summary 20

integration and removal of barriers between countries/economies

Overview Global Economy Protection Tips and Tricks Summary 21

Forces driving globalisation (World Bank)

• New markets: growing global markets in services such as finance,

• New actors: MNCs → dominating world production through global supply

Overview Global Economy Protection Tips and Tricks Summary 22

• New rules and norms: market-based economic policies spreading,

• New tools of communication: internet and electronic communications

Overview Global Economy Protection Tips and Tricks Summary 23

• Trade in goods/services → increased dramatically in the last few

Factors that have strongly promoted globalisation:

• Trade agreements between countries

• Domestic deregulation → removal of rules and laws

• New technology in transport and communication

• Australia has reduced tariffs to a record low of 2.23%, in 2018

Overview Global Economy Protection Tips and Tricks Summary 24

• Multilateral agreements: across regions such as Asia or the Pacific

• The composition of global trade is continually changing due to demand of

• The direction of trade flows has changed due to changes in the

Overview Global Economy Protection Tips and Tricks Summary 25

• Finance: is the most globalised feature of the world economy because

• Main drivers of global financial flows:

• Foreign exchange daily turnover $4 trillion (2010) to $6.6 trillion

Overview Global Economy Protection Tips and Tricks Summary 26