EXAM PREPARATION AND 2014 HSC QUESTIONS

Transcription

1 EXAM PREPARATION AND 2014 HSC QUESTIONS TIM RILEY The HSC Examination The HSC Economics Syllabus Exam Preparation and 2014 Questions

2 HSC ECONOMICS EXAMINATION 2015 The Exam Tests Syllabus Knowledge and Skills Outcomes Not Current Economics Section 1-20 x Multiple Choice (20 Marks) Section II - 4 x Short Answers (40 Marks) Section III - 1 Stimulus Essay (20 Marks) Section IV - 1 Essay (20 Marks) Criteria Based Marking - Marking Guidelines

3 The Four Syllabus Topics The Global Economy Australia s Place in the Global Economy Economic Issues Economic Policies and Management * Across topic or crossover questions are commonplace in examinations and assessment tasks e.g. an economic policy to address an economic issue

4 Economics Syllabus Outcomes HSC Course Outcomes H1 to H12 Topic Outcomes: - Learn to(s) and Learn About(s) - Knowledge and understanding - Skills (calculations and diagram interpretation) - Values and attitudes (competing policies)

5 The Syllabus Amendments: What s New? International Economic Integration Developing, Emerging and Advanced Economies Environmental Sustainability Multilateral and Bilateral FTAs NAIRU National and Global Context for Environmental Management

6 SECTION I: MULTIPLE CHOICE QUESTIONS Definitions of Basic Economic Concepts Economics Calculations Diagram Interpretation Application of Economic Analysis

7 ANSWERS TO QUESTIONS B An increase in labour market flexibility (such as enterprise agreements) could help to reduce the unemployment rate and increase the participation rate through an increase in the demand for labour leading to more employment vacancies. 2. A A trading bloc is a group of countries with free trade between themselves but they erect trade barriers against non member countries. The European Union is a trade bloc. 3. B At the tariff price of $25 domestic demand is equal to domestic supply and there are no imports and therefore no tariff revenue to the government. If the tariff is reduced from $15 to $10 the good will sell for $20. At the price of $20, domestic demand is 60 million and domestic supply is 40 million. Therefore 20 million goods are imported. The tariff revenue collected by the government is equal to the quantity of imports multiplied by the tariff i.e. 20 million x $10 = $200 million

8 4. C If the government proposed to introduce a $5 tariff in addition to the world price of $10 this would lead to domestic demand of 70 million and domestic supply of 30 million. Therefore imports would be 40 million units. An import quota of 40 million units would have the same effect on domestic output as a $5 tariff. 5. B The formula for calculating the inflation rate is: Current CPI Previous CPI 100 Previous CPI x 1 The inflation rate for 2013 can be calculated as follows: x 1 = 150 x = 4%

9 ANSWERS TO 2014 HSC 1. A 11. D 2. B 12. B 3. D 13. D 4. B 14. A 5. C 15. A 6. C 16. C 7. B 17. D 8. C 18. A 9. D 19. B 10. A 20. C A x 5 B x 5 C x 5 D x 5

10 SECTION II: FOUR SHORT ANSWER QUESTIONS (40 Marks) Sometimes but not always stimulus material may be supplied Structured Questions - about 12 items Interpretation of Diagrams or Data Lower to Higher Order Thinking Skills Concise Answers Within Spaces Provided Provide Detail According to the Allocation of Marks Do not write outside the lines as the answer is scanned Practise short answer writing skills: answer the question with relevant and adequate detail

11 Question 24 (a) An exchange rate depreciation occurs when a currency loses or falls in value and therefore leads to reduced purchasing power. One cause of an exchange rate depreciation is a decrease in demand for a currency caused by a lower demand for that country s exports. (b) The Trade Weighted Index is measure of the value of the Australian dollar according to a trade weighted index of movements against 20 currencies of Australia s trading partners. The value of these currencies is weighted according to their importance in Australia s goods and services trade. The TWI can decline even as the Australian dollar appreciates against the euro because the combined weight of the other currencies (e.g. RMB, US dollar & Yen) will exceed the weight of the euro. If the Australian dollar is depreciating against a majority of currencies in the TWI this will lead to a decline in the TWI. (c) If domestic interest rates rise relative to overseas this will reduce the demand for imports because the cost of borrowing to buy imports will rise. This may lead to lower import spending in the current account and help to reduce an existing trade deficit. Lower import spending relative to export earnings should lead to a smaller current account deficit. Higher domestic interest rates relative to overseas will attract capital inflow including foreign investment into Australia. This should lead to an increase in the financial account surplus in the balance of payments.

12 GLOSSARY OF KEY WORDS Analyse: identification of key components and relationship between them Explain: relate cause and effect Discuss: identify issues and provide points for and/or against Evaluate: make a judgement based on criteria Describe: provide characteristics or features Outline: sketch in general terms Calculate What? Which? How? Why?

13 STIMULUS ESSAYS IN SECTION III Choose the Best Question and Underline the Operative Words and Refer to the Rubric Write an Essay Plan Refer to the Stimulus Material Answer the Question Refer to Other Relevant Information (Knowledge, Theory, Data and Diagrams)

14 Section III Rubric In your answer you will be assessed on how well you: Demonstrate knowledge and understanding relevant to the question Use the information provided Apply relevant economic terms, concepts, relationships and theory Present a sustained, logical and cohesive response

15 Question 25 Introduction Define important terms in the question and show the relationship between them: - income and wealth - income inequality and wealth inequality - labour market policies - fiscal policy - the economic and social goal of equality in the distribution of income and wealth Income and wealth inequality can be reduced through the Australian government s use of labour market policy to provide a system of minimum wages and programmes to reduce unemployment. Fiscal policy can be used to reduce income and wealth inequality through the systems of progressive taxation and transfer payments which redistribute incomes from higher income earners to lower income earners. This creates an income safety net and helps to provide the poorest 20% of income earners with income support as illustrated by the stimulus material.

16 Body Explain (relates cause and effect) how both labour market policies and fiscal policies can be used to reduce income and wealth inequality. It would be appropriate to explain the use of the Lorenz Curve and Gini co-efficient in measuring and interpreting changes in the distribution of income and wealth over time. Labour market policies used to reduce income and wealth inequality include the National Employment Standards, adjustments to the National Minimum Wage and the system of Modern Awards. There could also be an explanation of the importance of enterprise agreements in encouraging workers to raise skills and productivity to earn higher incomes. Other important labour market policies include those that target youth and long term unemployment such as education, training, skills formation, wage subsidies and apprenticeships. Fiscal policy refers to the Australian government s use of changes in revenue and expenditure in its annual budget to affect economic activity, resource allocation and income distribution. Increasingly labour market policy has been linked to progressive taxation and transfer payments to increase incentives for workforce participation and income from paid work: The progressive system of taxation taxes those on higher incomes at a higher rate than those on lower incomes. The revenue raised from progressive taxation can be used to redistribute income from high income earners to low income earners through the system of expenditure on welfare or transfer payments such as pensions, allowances and tax benefits (refer to the data in the stimulus material).

17 These social welfare benefits are targeted and means tested so that payments are made to eligible persons and groups who are the most disadvantaged in society such as the elderly, veterans, low income families with children, the disabled, the sick and the unemployed. The eligibility for welfare payments has been increasingly linked to workforce participation with successive governments strengthening the incentives for welfare beneficiaries to seek paid employment. This policy is designed to reduce welfare dependency and poverty traps (relate this to the stimulus extract). Conclusion Evidence from the ABS suggests that income inequality increased between 2005 and 2007 as wages and salaries and forms of unearned income grew for high income earners relative to low income earners leading to an increase in the Gini co-efficient. However between and income inequality decreased due to better targeting of welfare, increased social security payments and tax cuts for low income earners. The Australian government s effective conduct of monetary and fiscal policies is also important in reducing income inequality through achieving sustainable economic and employment growth and rising incomes.

18 SECTION IV ESSAYS Use the 5 Minutes Reading Time to Read the Questions Underline the Key Words and Use the Rubric Plan Each Essay and Follow the Plan Answer all Parts of the Question Provide Adequate Detail for each Part of the Question Use Economic Theory and Policy Include Diagrams and Examples

19 FEATURES OF EXCELLENT ESSAYS (1) Answers the Question Clear and Logical Structure Legible Handwriting Clear English Expression Frequent Use of Paragraphing Use of a Plan

20 FEATURES OF EXCELLENT ESSAYS (2) Use of Short Factual Sentences Inclusion of Relevant Diagrams and Examples Non Emotive and Politically Balanced Style Blend of Economic Theory and Policy Use of Economic Terms and Concepts

21 STUDENT RESOURCES - Assessment and Reporting in Economics - The Economics Stage 6 Syllabus and Amendments - Past HSC Economics Examination papers - Notes from the Marking Centre and Marking Guidelines HSC Exam Workbook - Sample Answers GOOD LUCK IN THE 2015 HSC!