Centre Number
Student Number
2013
HSC MID-YEAR EXAMINATION
Economics
Total marks – 70
General Instructions
 Reading time – 5 minutes
 Working time – 2 hours
Section I
Pages 3 - 9
20 marks
 Attempt Questions 1 - 20
 Allow about 30 minutes for this section
 Write using blue or black pen
 Write your Centre Number and
Student Number at the top of this
page, page 10 and the multiplechoice answer sheet, page 21
Section II
Pages 10 - 16
30 marks
 Attempt Questions 21 - 23
 Allow about 50 minutes for this section
Section III
Page 17 - 18
20 marks
 Attempt either Question 24 or Question 25
 Allow about 40 minutes for this section
Disclaimer
Every effort has been made to prepare this Examination in accordance with the Board of Studies documents. No guarantee or warranty is
made or implied that the Examination paper mirrors in every respect the actual HSC Examination question paper in this course. This paper
does not constitute ‘advice’ nor can it be construed as an authoritative interpretation of Board of Studies intentions. No liability for any
reliance, use or purpose related to this paper is taken. Advice on HSC examination issues is only to be obtained from the NSW Board of
Studies. The publisher does not accept any responsibility for accuracy of papers which have been modified.
MIDEC13_EXAM
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MIDEC13_EXAM
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2013 HSC MID-YEAR EXAMINATION
ECONOMICS
Section I
20 marks
Attempt Questions 1-20
Allow about 30 minutes for this section
Use the multiple-choice answer sheet provided for Questions 1-20
Select the alternative A, B, C or D that best answers the question. Fill in the response oval
completely.
Sample
2 + 4 = (A) 2
(B) 6
(C) 8
(D) 9
A
B
C
D
If you think you have made a mistake, put a cross through the incorrect answer and fill in the
new answer.
A
B
C
D
If you have changed your mind and have crossed out what you consider to be the correct
answer, then indicate this by writing the word correct and drawing an arrow as follows:
correct
A
1
B
C
D
Which of the following statements describes a factor that contributes to an increase in
globalisation?
(A)
Many nations are rejecting trade liberalisation as economies slow down
(B)
The World Trade Organisation seeks to resolve trade disputes between nations
(C)
An increase in domestic savings rates globally has diminished portfolio
investment flows
(D)
A fall in global migration rates has seen stabilisation of population growth rates
in developed nations
MIDEC13_EXAM
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2
3
4
Which of the following policies will most likely reduce the impact of the international
business cycle on an individual economy?
(A)
Increasing foreign borrowing by the government
(B)
An increase in domestic interest rates
(C)
Establishing a fixed exchange rate
(D)
Reducing subsidies and tariffs
A transnational company establishes manufacturing operations in a developing
country. What government policy will ensure the most benefit for the local economy?
(A)
Not requiring the transnational company to pay local taxes or charges
(B)
Requiring the payment of legislated minimum wages for local staff
(C)
Allowing the company to use migrant and overseas labour in the factories
(D)
Exempting the company from meeting health and safety standards
The table below shows exchange rate data for an economy.
Exchange rate data for one unit of a local currency
against selected currencies.
USD
Euro
TWI
Year 1
1.06
0.92
89
Year 2
1.12
0.93
86
Which of the following statements is true for this economy?
(A)
The economy has grown larger than the US economy
(B)
The economy has increased the volume of trade it conducts with European
nations
(C)
Most of the economy’s trade is with countries other than the USA or in Europe
(D)
The economy is performing better than most other global economies
MIDEC13_EXAM
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5
6
Which of the following includes Australia as a member?
(A)
G20
(B)
NAFTA
(C)
EU
(D)
G8
The following information is from an economy that has recently joined a trade bloc:
Change in exports to member countries
+ $4.5 billion
Change in imports from member countries
+ $ 2.3 billion
Change in exports to non-member countries
- $3.6 billion
Change in imports from non-member countries
-$4.1 billion
Which of the following statements best applies to this economy?
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(A)
The economy is now accessing a smaller market for its goods
(B)
The economy has experienced an increase in its current account deficit
(C)
The GDP of this economy has fallen
(D)
The trade bloc’s common tariff has reduced the availability of goods in this
economy
Which of the following is an economic impact of free trade in the short term, all else
being equal?
(A)
An increase in import prices
(B)
An increase in the growth of new industries
(C)
An increase in structural unemployment
(D)
A decrease in overall unemployment
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8
An economy, engaging in free trade, imports 20 million units of a good each year.
The following table shows the impacts of the government placing a tariff on the goods.
At world price
($7.00)
Following imposition
of tariff ($9.00)
Domestic production levels
10 million units
15 million units
Government revenue
Nil
$10 million
Which of the following statements describes the situation in this economy?
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(A)
The local producers are more productive and efficient after the imposition of
the tariff
(B)
The total consumer demand after the tariff has been imposed is 20 million units
(C)
After imposing the tariff, the economy is importing 10 million units
(D)
Consumer choice improves after the imposition of the tariff
Why would an economist use the Human Development Index to assess an economy’s
economic development?
(A)
It is produced by the International Monetary Fund
(B)
It focuses on the change in incomes within an economy
(C)
It relies on social as well as economic indicators
(D)
It provides a more accurate financial measurement than GDP
An increase in the number of quotas used by a government in its trade policy will have
the same impact on trade as which of the following?
(A)
A reduction in the use of subsidies
(B)
A decrease in the number of tariffs used
(C)
A relaxation of local content rules
(D)
An increase in tariff rates
MIDEC13_EXAM
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11
12
13
Which of the following would increase Australia’s net foreign debt?
(A)
An increase in commodity prices
(B)
A decrease in national savings
(C)
An increase in inflation rates
(D)
A decrease in business confidence
Which of the following will have the most detrimental impact on a domestic economy?
(A)
The payment of a government subsidy to a large local manufacturer
(B)
An increase in protection against dumping
(C)
The reduction of a tariff on an industry in which the economy has a
comparative advantage
(D)
The imposition of a tariff on a product not produced in the domestic economy
The following table shows price indices for an economy over time:
Import Price Index
Export Price Index
Year 1
160
144
Year 2
155
142
Which of the following statements is correct?
(A)
The terms of trade has improved between Year 1 and Year 2
(B)
The economy is exporting 2% fewer goods in Year 2 than in Year 1
(C)
There is an increase in global commodity prices
(D)
The terms of trade has deteriorated between Year 1 and Year 2
MIDEC13_EXAM
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14
15
16
Other things being equal, which of the following will cause an increase in capital
inflow into Australia?
(A)
An increase in inflation
(B)
An increase in company taxes
(C)
An increase in the exchange rate
(D)
An increase in interest rates
Which of the following economic stakeholders will be most disadvantaged by a long
term appreciation in an exchange rate?
(A)
Consumers
(B)
Outbound Australian travellers
(C)
Importers
(D)
Firms producing import-competing goods and services
The following diagram shows the domestic market for a good in an economy,
following a change in government trade policy.
Price
S2
S1
Pe
Pw
D
0
A
B
C
Quantity
What quantity of goods will be produced by local firms following the removal of the
subsidy?
(A)
A
(B)
B
(C)
C
(D)
(A – C)
MIDEC13_EXAM
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17
18
Which of the following would cause a decrease in Australia’s international
competitiveness?
(A)
A decrease in inflation
(B)
An increase in interest rates
(C)
A decrease in unemployment
(D)
An increase in the minimum wage
The following table shows data from the balance of payments in an economy.
Imports
Exports
Income credits
Income debits
Net Transfers
Net Services
$A million
500
700
1000
1400
-100
100
What is the value of the current account?
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20
(A)
$200 million
(B)
- $200 million
(C)
- $300 million
(D)
- $700 million
Which of the following describes the recent trend in Australia’s trade?
(A)
A narrowing of Australia’s export base
(B)
An increasing dependency on European markets
(C)
A reliance on manufacturing exports
(D)
A reduction in the reliance on South East Asian markets
Which of the following statements best applies to developing nations?
(A)
They suffer high levels of external indebtedness
(B)
They are not reliant on foreign aid
(C)
They have high levels of economic stability
(D)
They experience long term increases in real income per capita
MIDEC13_EXAM
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2013 HSC MID-YEAR EXAMINATION
ECONOMICS
Centre Number
Student Number
Economics
Section II
30 marks
Attempt Questions 21-23
Allow about 50 minutes for this section
Answer the questions in the spaces provided.
Show all relevant working in questions involving calculations.
Question 21 (10 marks)
(a)
Marks
Distinguish between a fixed exchange rate and a flexible exchange rate.
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Question 21 (continued)
Marks
(b) Outline TWO reasons for an appreciation in a flexible exchange rate over time.
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Question 21 (continued)
Marks
(c) Explain an economic cost and an economic benefit of an economy maintaining a
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flexible exchange rate.
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End of Question 21
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Question 22 (10 marks)
Marks
(a) What is Gross World Product?
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(b) Describe ONE factor that could cause an increase in gross world product over
time.
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(c) How does the economic performance of large economies influence the rates of
economic growth in smaller nations?
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Question 22 (continued)
(d) Explain the costs to the global economy of the operations of ONE international
organisation.
Marks
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End of Question 22
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Question 23 (10 marks)
Marks
(a) What is the difference between net income and net transfers in the current account?
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(b) How might an increase in immigration affect the net transfers component of the
current account?
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Question 23 continues over the page
MIDEC13_EXAM
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Question 23 (continued)
(c) Describe how an increase in consumer confidence in Australia could have a
detrimental impact upon Australia’s current account?
Marks
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(d) How would an increase in the overseas borrowing by the Australian government
affect the current account?
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MIDEC13_EXAM
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Economics
Section III
20 marks
Attempt either Question 24 or Question 25
Allow about 40 minutes for this section
Answer the question in a writing booklet. Extra writing booklets are available.
In your answer you will be assessed on how well you:
▆ use your knowledge and economic information provided
▆ apply economic terms, concepts, relationships and theory
▆ present a sustained, logical and well-structured answer to the question
Question 24 (20 marks)
Analyse the effects of globalisation on the pattern of global trade. In your response, you should refer to
the economic information provided.
Globalisation creates an increasing interdependence between nations. It is
not unsurprising that this reliance on other nations leads to convergence in
the performance of nations
OR
MIDEC13_EXAM
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Question 25 (20 marks)
Analyse the impacts of global economic performance on Australia’s external stability.
In your response, you should refer to the economic information provided.
Traditionally, Australia’s success has been tied to commodity prices and the global
demand for primary output. Now, it is tied to regional, if not even more specific,
demand for an increasingly narrow range of exported products.
END OF PAPER
MIDEC13_EXAM
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Centre Number
Student Number
ECONOMICS – MULTIPLE-CHOICE ANSWER SHEET
ATTEMPT ALL QUESTIONS
Question
MIDEC13_EXAM
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A
B
C
D
2
A
B
C
D
3
A
B
C
D
4
A
B
C
D
5
A
B
C
D
6
A
B
C
D
7
A
B
C
D
8
A
B
C
D
9
A
B
C
D
10
A
B
C
D
11
A
B
C
D
12
A
B
C
D
13
A
B
C
D
14
A
B
C
D
15
A
B
C
D
16
A
B
C
D
17
A
B
C
D
18
A
B
C
D
19
A
B
C
D
20
A
B
C
D
19
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MIDEC13_EXAM
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