Economics IA1 Past Paper PDF 2023-2024 | Multiple Choice | Practice Questions

Okay, here is the conversion of the attached document or images into a structured markdown format. ### Page 1 # Question 6 Up to 80 word response Explain ONE cost and ONE benefit of globalization. ### Page 2 # Question 7 Up to 100 word response Explain the impact that a rise in domestic inflat...

Okay, here is the conversion of the attached document or images into a structured markdown format. ### Page 1 # Question 6 Up to 80 word response Explain ONE cost and ONE benefit of globalization. ### Page 2 # Question 7 Up to 100 word response Explain the impact that a rise in domestic inflation would have on the Australian dollar. Then, in the space below, draw and annotate a demand and supply diagram to show the impact on Australian dollars (appreciation or depreciation). ### Page 3 # QUESTION 9: Analyse the Production Possibilities of computers and wheat for the two different countries - Springfield and Quohog - as outlined in the table below. Using the theories of Absolute Advantage and Comparative Advantage, determine which country should produce computers and which country should produce wheat. Justify your reasoning. (50 words) | Country | Computers | Wheat | | ----------- | ----------- | ----------- | | Springfield | 300 | 800 | | Quohog | 200 | 400 | | Total | 500 | 1200 | ### Page 4 # QUESTION 10: Use the data below to answer the following questions. | YEAR | Index of average export prices | Index of average Import prices | | ----------- | ----------- | ----------- | | 1 | 100 | 100 | | 2 | 102 | 100 | | 3 | 106 | 104 | | 4 | 110 | 110 | | 5 | 108 | 106 | a) Calculate the terms of trade index for both Year 2 and Year 4. Show your working to support your calculations. b) Describe whether the movement in the terms of trade from Year 2 and Year 4 has been favourable or unfavourable. Explain two effects this change would have on an economy? (50 words) ### Page 5 # Question 8 Up to 100 word response Explain how events in an overseas economy can affect Australia's trade. Use a specific example in your response. ### Page 6 # QUESTION 11: Explain three factors that have contributed to the growth of the global economy. (100 words) ### Page 7 # QUESTION 12: Describe the impact that trade has on employment and inflation within an economy. (100 words) ### Page 8 # Question 9 Up to 100 word response Explain the conflict between achieving external stability and increased trade for the Australian economy. ### Page 9 # Question 9 Up to 100 word response Explain two factors that have contributed to the growth of multinational corporations. ### Page 10 # Question 10 Up to 100 word response The table below shows the production of Cheese and Wine for New Zealand and Australia respectively from a set amount of resources. There are two separate questions related to this table. | Country | Cheese | Wine | | ----------- | ----------- | ----------- | | New Zealand | 180 | 160 | | Australia | 200 | 240 | a. Using the table above, calculate which nation has the Comparative Advantage in each product (working must be shown). b. Explain how both these nations can benefit from specialisation and trade, using the calculations from part (a) in your response. ### Page 11 # PART A: MULTIPLE CHOICE – COMPREHENDING 1. The graph shows the demand for, and supply of, Australian dollars. - The graph shows the supply and demand curves intersecting at a dollar amount marked as $A. Which combination of shifts in the demand and supply curves must result in a depreciation of the Australian dollar? | | Demand curve shift | Supply curve shift | | ----------- | ----------- | ----------- | | a) | Left | Right | | b) | Left | Left | | c) | Right | Left | | d) | Right | Right | 2. Which combination of factors is most likely to result in an increase in Australia's Trade Weighted Index? | | Terms of trade | Global interest rates relative to Australian interest rates | | ----------- | ----------- | ----------- | | A. | Increase | Increase | | B. | Increase | Decrease | | C. | Decrease | Increase | | D. | Decrease | Decrease | ### Page 12 3. Which of the following will cause an appreciation of the Australian dollar? a) An increase in domestic inflation. b) An increase in the demand for Australian exports. c) A decrease in foreign investment in Australia d) An decrease in Australian interest rates 4. Which of the following is most likely to reduce Australia's import volumes? | | Economic Activity in Australia | Australian Dollar | | ----------- | ----------- | ----------- | | A) | Recession | Appreciation | | B) | Expansion | Depreciation | | C) | Expansion | Appreciation | | D) | Recession | Depreciation | 5. Which of the following is a function of the International Monetary Fund (IMF)? a) Commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. b) They set procedures for settling trade disputes. c) Seek to ensure that trade requirements are being followed and that trade agreements are being properly implemented. d) Oversees and promotes international financial stability and monetary cooperation. ### Page 13 # Question 10 Up to 100 word response Use the table below to answer the following two sub-questions about Ginland (a fictitious economy): | | 2023 | 2024 | | --------------------- | ----- | ----- | | Export price index | 440 | 200 | | Import price index | 400 | 220 | | Terms of trade index | | | a) Calculate the terms of trade index for both 2023 and 2024. Show your working to support your calculations. b) Describe whether the movement in terms of trade from 2023 to 2024 has been favourable or unfavourable. Explain two effects this change may have on the economy of Ginland? ### Page 14 # Part A - Comprehending **Question 1** A primary reason why nations conduct international trade is because: (A) interest rates are not identical in all trading nations. (B) trade enhances opportunities to accumulate profits. (C) resources are not equally distributed to all trading nations. (D) some nations prefer to produce one thing while others produce another. **Question 2** What is the difference between the role of the International Monetary Fund (IMF) and the role of the World Bank? (A) The IMF promotes global financial stability whilst the World Bank promotes global economic development. (B) The IMF provides advice to countries about fiscal policies whilst the WorldBank provides financial stability. (C) The IMF provides structural adjustments policies and the World Bank provides financial stability. (D) The IMF provides monetary policy advice whilst the World bank promotes freetrade in the global economy. ### Page 15 # SHORT RESPONSE SECTION **QUESTION 6:** Explain how Australia's exchange rate is determined. (100 words) ### Page 16 **Question 3** This question refers to the table below, which shows the production of wheat and beef in two countries. | | Wheat | Beef | | --------- | ----- | ---- | | Country A | 650 | 400 | | Country B | 600 | 200 | | Total | 1250 | 600 | Country B has: (A) a comparative advantage in wheat production. (B) a comparative advantage in beef production. (C) an absolute advantage in beef production. (D) a comparative advantage in the production of both beef and wool. **Question 4** Which of the following describes a benefit of a depreciation of the Australian dollar to the Australian economy? (A) lower levels of inflation. (B) increased import volumes. (C) increase the value of Australia's net foreign liabilities. (D) increased international competitiveness. ### Page 17 **QUESTION 7:** Explain three benefits of international trade to the Australian economy. (100 words) ### Page 18 # Part A - Comprehending **Question 1** Which of the following is NOT considered a key cause of globalisation? a. Migration and movement of labour.\ b. Increase in domestically manufactured goods\ c. Lowering of barriers to trade.\ d. Easier movement of FDI and portfolio investment. **Question 2** In relation to Australia's Trade Weighted Index (TWI), which of the following is correct? a. the TWI is comprised only of the currencies of China, Japan and the United States b. the TWI is based only upon Australia's merchandise goods trade\ c. the TWI weights its currencies according to the volume of trade between Australia and its trading partners d. the TWI is based only upon Australia's services trade **Question 3** The exchange rate determines: a. how many Australian dollars must be paid by the exporter to give the foreign importer the sum asked for the goods\ b. how many goods the foreign exporter receives from the domestic importer\ c. the extent of changes in the terms of trade\ d. how many Australian dollars must be paid by the importer to give the foreign exporter the sum asked for the goods. ### Page 19 Ceteris paribus, the terms of trade is measured by the general level of prices: a) received for exports and paid for imports. b) paid for all goods imported by the home country. c) received for all goods exported by the home country. d) of primary products as opposed to manufactured products. Answer **Question 4** ### Page 20 **Question 5** Use the information in the table below to answer the following question: | Country | Tonnes of Steel | DVD's | | ------- | --------------- | ----- | | China | 80 | 40 | | Japan | 20 | 20 | The opportunity cost of one DVD in China is: a) one tonne of steel. b) two tonnes of steel. c) half a tonne of steel. d) one and a half tonnes of steel. Answer ### Page 21 **Question 6** Up to 100 word response Ceteris paribus, describe two (2) most likely effects of an appreciation of the Australian Dollar (AUD) to an Australian Export Industry. ### Page 22 **Question 7** Up to 100 word response Explain, through the use of a demand and supply diagram, the impact of a decline in the number of international tertiary students coming to Australia on the $Australia/$US exchange rate. - There is a demand and supply graph, the y-axis is labeled **$A/US** and x-axis is labeled **Qty of $A** ### Page 23 **Question 5** Other things being equal, what will the effect be on the Trade Weighted Index (TWI) and on the Terms of Trade, if China reduces demand for Australian exports? | | TWI | Terms of Trade | | ----- | -------- | -------------- | | (A) | Decrease | Increase | | (B) | Increase | Increase | | (C) | Decrease | Decrease | | (D) | Increase | Decease | ### Page 24 **QUESTION 8:** Identify and explain ONE factor that might cause a rise in the value of the $AUD. Draw and annotate a demand-supply diagram that illustrates an appreciation of the $AUD. (50 words) ### Page 25 **Question 8** Up to 100 word response Referring to the information below, identify two significant changes in the direction of Australia's exports in the last twenty years and explain one possible reason for each of these changes. **Exports by Destination** *Annual, share of total values* This is graph of Australia exports by Destination: * The Y axis represents percentage(%) of total exports with the scale ranging from 0 to 30. * X axis represents years and ranges from 2000 to 2020 with intervals of 4 years. * The graph contains multiple line plots, each representing a different destination. **Key Destinations and trends:** *China:* Starting below 10% in 2000, China's export share shows a strong upward trend, reaching well above 30% by 2020. *US:* The United States shows a slight downward trend, starting above 10% in 2000 and decreasing to around 10% in 2020. *Japan:* Japan's export share starts above 20% in 2000, decreases and then stabilizes around 20 % in 2020. *India:* India's export share remains relatively stable, starting at approximately 5 % in 2000 and remaining close to that level in 2020. *South Korea:* South Korea's export share also remains stable, positioned slightly above 10% throughout the period. *EU-27 and UK*: These lines show a relatively flat trend, both starting and remaining below 10% over the two decades. *Source: ABS; RBA* Let me know if you need further assistance.