Β§-Economics Q&A
QLD Β· QCAAβ Economics
Economics Q&A by dot point
A short Q&A bank for every QLD Economics syllabus dot point. Each question and answer is drawn directly from our worked dot-point page, so you can scan key concepts before opening the long-form answer.
Unit 1: Markets and models
Explain the circular flow of income model, including the five sectors, the flows of income and expenditure, and the role of injections and leakages in determining the level of economic activity
Explain the operation of the market mechanism including the laws of demand and supply, equilibrium price and quantity, movements along and shifts of curves, and price elasticity of demand and supply
Explain how government price controls (price ceilings and price floors) affect the operation of a market, and analyse the effects on consumer surplus, producer surplus and total welfare
Explain the basic economic problem of scarcity and the resulting need to make choices, including the concepts of opportunity cost and the production possibility frontier
Explain how the price mechanism allocates resources in a market economy through the signalling, incentive and rationing functions of prices, and how this answers the what, how and for whom questions
Explain the different market structures (perfect competition, monopolistic competition, oligopoly, monopoly) and the role of government in regulating market conduct, including the ACCC and the Competition and Consumer Act 2010
Unit 2: Modified markets
Explain the factors that influence aggregate demand and aggregate supply in the Australian economy, and how each affects real GDP, employment and inflation
Explain the measurement of macroeconomic activity including real GDP, the Consumer Price Index and the unemployment rate, and the limitations of each measure
Explain the forms of market failure (public goods, externalities, asymmetric information, market power) and analyse the rationale for and forms of government intervention to correct market failure
Explain the expenditure multiplier process, including the marginal propensities to consume and save, the leakages that determine the size of the multiplier, and the effect of a change in injections on national income
Unit 3: International economics
Explain the determination of the Australian exchange rate under a floating regime, draw the foreign exchange market diagram, and analyse the structure of the balance of payments including the current account and capital and financial account
Explain the impact of globalisation on Australia, the role of major international organisations (WTO, IMF, World Bank), and evaluate the impact of Australia's free trade agreements
Explain the theory of comparative advantage and the gains from trade, analyse the rationale for and forms of protection (tariffs, subsidies, quotas, local content rules), and evaluate the impact of free trade agreements on the Australian economy
Explain the terms of trade, how they are measured, the factors that cause them to change, and analyse the effects of a change in the terms of trade on the Australian economy
Unit 4: Contemporary macroeconomics
Explain the role of aggregate supply policies in achieving the macroeconomic objectives, including training and education, infrastructure, innovation and R&D, immigration, competition and deregulation, and tax reform
Explain the objective of strong and sustainable economic growth, the difference between actual and potential growth, the main sources of economic growth, and analyse the benefits and costs of growth
Explain the role of fiscal policy and monetary policy in achieving the macroeconomic objectives, including the structure of the Commonwealth Budget, the cash rate as the RBA instrument, and the transmission mechanism
Explain the distribution of income and wealth in Australia, the role of the tax and transfer system in redistribution, and analyse the impact of income distribution on aggregate demand, social cohesion and intergenerational equity
Explain the major macroeconomic objectives (strong and sustainable economic growth, full employment, low and stable inflation, equity, environmental sustainability), how each is measured, and the trade-offs between them
