2007 Economics Multiple Choice Questions

[costargh]

Hey guys!!!
I was bored so I did last years multiple choice questions and I got 15/15 Give them ago and see how you go. Check your answers using the examiners report. (Link @ the bottom of the page)
If you get any wrong, let us know which ones you got wrong because chances are they are the questions that will be most difficult for most students


Question 1
Private Consumption Expenditure (C) in Australia is most likely to be increased by
A. a decrease in consumer confidence.
B. an increase in domestic interest rates.
C. a drought across Australia.
D. a decrease in marginal rates of income tax.

Question 2
What is labour productivity?
A. the amount of output per hour worked
B. the economy’s potential to produce goods and services
C. a resource that provides physical power and mental talents
D. the output resulting from the input of all factors of production

Question 3
Oil is a close substitute for coal.
If the price of oil increases, then
A. the supply curve for coal will shift to the right.
B. the demand curve for coal will shift to the right.
C. the equilibrium price and quantity of coal will not change.
D. the quantity of coal demanded will decline.

Question 4
The true extent of unemployment in Australia may be greater than indicated by the measure of the unemployment
rate provided by the Australian Bureau of Statistics (ABS).
This is because the measure
A. only includes cyclical unemployment.
B. does not include those who are seeking part-time work.
C. does not include the unemployment of young people aged below twenty-one years.
D. does not include those who may have been discouraged from actively seeking work

Question 5
Which one of the following is not a feature of a competitive market?
A. many buyers
B. many sellers
C. barriers to entry
D. unregulated prices

Question 6
In response to rising oil prices, which would be the least likely to occur?
A. more walking
B. more air travel
C. more use of public transport
D. a relative increase in the demand for small cars

Question 7
A prolonged drought would be expected to
A. have a positive effect on both the budget outcome and the current account deficit (CAD).
B. have a positive effect on the budget outcome and a negative effect on the current account deficit (CAD).
C. have a negative effect on the budget outcome and a positive effect on the current account deficit (CAD).
D. have a negative effect on both the budget outcome and the current account deficit (CAD).

Question 8
The table below shows selected data for an economy that uses a floating exchange rate.

The balance on current account for this economy is
A. –$50bn.
B. –$30bn.
C. $10bn.
D. $20bn.

Question 9
Which one of the following policy actions would be most likely to have a different effect on the labour force
participation rate from the other three policy actions?
A. raising the minimum school leaving age
B. increasing the number of childcare places available
C. removing the compulsory retirement age

Question 10
The distribution of after-tax income between persons will become less equal as a result of which combination
of the following circumstances?
i. a decrease in the rate of unemployment
ii. a decrease in the top marginal income tax rate
iii. an increase in the Goods and Services Tax (GST)
iv. an increase in government spending on education and training programs

A. ii. and iii.
B. i., ii. and iii.
C. iii. and iv.
D. i. and iv.

Question 11
Australia’s company tax is an example of
A. an indirect, proportional tax.
B. a direct, progressive tax.
C. a direct, proportional tax.
D. an indirect, regressive tax.

Question 12
Economists view pollution as an example of
A. a public good.
B. an externality.
C. economies of scale.
D. the evils of monopoly.

Question 13
A possible weakness of budgetary (fiscal) policy in managing the Australian economy is that
A. it only operates indirectly by influencing interest rates.
B. it cannot be used in a selective fashion to provide relief to particular sections of the economy.
C. it can be difficult for a government to change some tax and expenditure settings because of political
considerations.
D. automatic stabilisers do not influence aggregate demand.

Question 14
A reason for the policy of microeconomic reform in Australia is to
A. encourage imports into Australia.
B. allow governments to have more control over resource allocation.
C. protect Australian industries from foreign competition.
D. make Australian industries more internationally competitive.

Question 15
A contractionary monetary policy is likely to
A. reduce the demand for labour by firms.
B. encourage capital outflow and weaken the value of the Australian dollar.
C. encourage spending and discourage saving.
D. reduce household disposable income and raise levels of aggregate demand.
D. requiring single parents to work once their youngest child is at school




http://www.vcaa.vic.edu.au/vce/studies/economics/assessreports/2007/economics_assessrep_07.pdf

[mand3e]

i got 3 wrong. LOL

[costargh]

Which ones did you get wrong?

[niena18]

I got 3 wrong.

Q6. I put B

Q14 - I put A

Q15 - I put B

[costargh]

I'll try the best I can to help show how you can come to the conclusion of the correct answer. Maybe that will help

Q6- The answer is B. You are correct

Q 14-Microeconomic reform deals with small sections or industries in the Australian economy. It therefore has no bearing on A which is to encourage imports because the government is trying to reform certain Australian industries, making them more productive and more internationally competitive.

It can't be B because that isn't a reason for microeconomic reform, it is just the way that government allocates resources, not why it does it.

It can't be C because the reform is not trying to set up higher boundaries for those protected industries, but to promote productivity.
So it is D where the productivity of certain Australian industries is promoted so that they can become more internationally competitive.

Q 15- (to be continued. going 4 dinner)

[cobby]

2 wrong


8 and 15

[AppleXY]

I liked those qs.

MC is one of my strengths in Econ, I got 100% for them in all sacs. So it's a good sign (hopefully LOL)

Good things about MC is you don't have to an essay to get your point across which is cool and easy. XD

[cobby]

I liked those qs.

MC is one of my strengths in Econ, I got 100% for them in all sacs. So it's a good sign (hopefully LOL)

Good things about MC is you don't have to an essay to get your point across which is cool and easy. XD

Can you please explain questions 8 and 15 to me??

[AppleXY]

Sure.

In short, it's 120-130+10-30 = - $30Bn

The current account doesn't account  Financial and Capital Accounts, remember that.  =)

For Q15, All the others are the opposite of contractionary Monetary policy does.

1. By increase cash rates, it of course gives higher returns for the end-investor (excl. taxes and others lol)
2. It decreases the consumer's propensity to spend, so  of course it can't increase the AD.
3. By increasing cash rates, it makes Australia a very attract country to invest and encourages capital inflow
4. MP only controls the Money Supply, it doesn't help with initiatives such as increasing the participation rate by so-and-so means. Thats the work for Fiscal (Budgetary) Policy.

=)

Hence A.

[cobby]

Sure.

In short, it's 120-130+10-30 = - $30Bn

The current account doesn't account  Financial and Capital Accounts. =)

Thanks

[ReVeL]

13/15.

Got the Current Account question wrong somehow and also question 10.

I understand them(I THINK) but for some reason got them wrong. Not a good sign haha.

[marbs]

15

I only got 12 on the 2004 one (i think it was).

[costargh]

15

I only got 12 on the 2004 one (i think it was).

were they hard? (2004 ones)

[marbs]

about the same as 07.... it was before revision, and a got caught up on a couple stupid things

[Eriny]

I thought that the '07 MC was much  easier than all the other exams I've done, but maybe that's because by that stage I had already done heaps of MC questions.