Consider the following data for an economy. Which one of the following statements about the economy is correct?

It is contracting, because leakages are greater than injections.

Which one of the following actions are economists most likely to consider as investment expenditure?

a supermarket installing self-serve checkouts

If an economy moved into the contraction phase of the business cycle, which combination of outcomes would result?

an increase in household savings and a decrease in consumer confidence

The effect of an increase in consumer confidence is likely to lead to

an increase in CPI and an increase in real GDP.

The labour force under-utilisation rate measures the

unemployed and underemployed as a % of the population aged 15 years +.

Which one of the following is likely to be classified as structural unemployment?

a person who loses their job as an Eco teacher due to less Eco students

Which one of the following is an example of government capital expenditure?

provision of transport infrastructure

The average material living standards of Australian households may decline if

Population growth is > than the ↑ in Real GDP over time.

Consider this data for the Australian economy. Based on this data, it is most likely that

cons conf will be ↓ing as disposable income growth may ↓.

Which one of the following is most likely to explain why the UE rate remains high despite strong rates of eco growth.

an increase in the rate of labour productivity growth

Which one is least likely to increase aggregate supply in the economy?

increased govt outlays allocated to payment of UE benefits

Which one of the following is the most likely to cause cost inflation?

an increase in superannuation contributions paid by employers

Consider the following data for Country Y. Based on this, which statement is not true?

The country experienced deflation in 2016 and 2017.

Which one of the following would be an example of a structurally unemployed person?

cash register operator replaced by self-service machines.

Hidden (disguised) unemployment is defined as people over the age of 15 who are:

Discouraged workers not actively seeking employment

In the 5 sector model, a ↑ in injections relative to leakages is most likely to result in:

neither a ↓ in C, AD and total incomes, nor ↑ the UE rate.

Refer to the AD and AS graph. Which one is likely to cause a shift from AS1 to AS2?

an increase in production costs

Consider this labour market of an economy. In comparing Yr 2 to Yr 1, which statement is true?

Yr 2 has a lower participation rate and a lower UE rate.

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VCE Economics Unit 3 AOS 2

33 termsStudBud Administration333 plays

Series of multi choice on the second area of study.

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Questions 33

Answers

1
Which one of the following is a leakage from the circular flow model of income?
transfer payments made by the government
an increase in consumption spending
an increase in imports
an increase in investment spending
2
Consider the following data for an economy. Which one of the following statements about the economy is correct?
It is expanding, because injections are greater than leakages.
It is contracting, because savings are greater than taxation receipts.
It is contracting, because leakages are greater than injections.
It is expanding, because imports are greater than private investment.
3
Consider the following data for an economy. Using this data, the rate of eco growth for the year ended June 2022 was
-4%
-2%
-20%
12%
4
Which one of the following actions are economists most likely to consider as investment expenditure?
a supermarket installing self-serve checkouts
a company paying its workers higher wages
a household purchasing a home entertainment unit
an individual buying shares
5
If an economy moved into the contraction phase of the business cycle, which combination of outcomes would result?
an increase in household savings and a decrease in consumer confidence
a ↓ in cyclical unemployment and a higher labour force participation rate
an increase in cyclical unemployment and an increase in business confidence
an ↑ in interest rates and a ↓ in the value of business investment
6
Which one of the following is likely to have a different effect on Australia’s rate of eco growth than the others?
an increase in the rate of economic growth in China
an increase in government spending on infrastructure
an increase in the tax-free threshold
an increase in the cash rate
7
Consider the following CPI data. The increase in the annual rate of IN from Year 2 to 3 is:
20%
11%
10%
21%
8
The effect of an increase in consumer confidence is likely to lead to
an increase in CPI and an increase in real GDP.
a decrease in CPI and a decrease in real GDP.
an increase in CPI and a decrease in real GDP.
a decrease in CPI and an increase in real GDP.
9
The type of unemployment caused by technological change is known as:
Cyclical unemployment
Structural unemployment
Hard-core unemployment
Frictional unemployment
10
Which one of the following terms describes the ‘potential output of an economy’?
production
Gross Domestic Product (GDP)
productivity
productive capacity
11
Consider the following hypothetical CPI data. The annualised rate of inflation for Quarter 2 is
1%
6%
3%
4%
12
Over time, which one of the following would most likely increase AS in the economy?
reducing the retirement age
reducing skilled migration
reducing the age pension
reducing funding for apprenticeships
13
Consider the following information for a hypothetical economy.
12.0%
10.0%
15.0%
12.5%
14
The labour force under-utilisation rate measures the
unemployed and underemployed as a % of the population aged 15 years +.
underemployed as a percentage of the population aged 15 years and over.
unemployed and underemployed as a percentage of the labour force.
unemployed as a percentage of the labour force.
15
Which one of the following is likely to be classified as structural unemployment?
a person who loses their job because they stole from their employer
a person who loses their job as a fruit picker when there is a drought
a person who loses their job as an Eco teacher due to less Eco students
a person who loses their job as a tour operator due to a recession
16
Which one of the following components of aggregate demand is the most unstable?
government consumption expenditure
government investment expenditure
private investment expenditure
private consumption expenditure
17
Consider the following table for CPI. The inflation rate for the year ended June 2021 is...
2%
1.8%
1%
0.8%
18
The type of unemployment caused by a downturn in the business cycle is known as
hard-core unemployment.
structural unemployment.
seasonal unemployment.
cyclical unemployment.
19
Which one of the following is an example of government capital expenditure?
provision of transport infrastructure
government loans to tertiary students for university fees
personal income tax refunds
payment of unemployment benefits
20
Which one of the following is unlikely to increase productivity?
p.investment in physical capital
increasing tariffs
labour skills training
innovation in work practices
21
The average material living standards of Australian households may decline if
Population growth is > than the ↑ in Real GDP over time.
Our CPI is ↑ing at a slower rate than our trading partners.
Pollution rises due to population growth in our cities.
Ave annual household disposable income rises faster than CPI
22
Consider this data for the Australian economy. Based on this data, it is most likely that
We will have fewer idle resources in Yr 2 compared to Yr 1.
Injections will have been stronger than leakages during Yr 2
cons conf will be ↓ing as disposable income growth may ↓.
the RBA may be more likely to raise interest rates in Year 2
23
Which one of the following is most likely to explain why the UE rate remains high despite strong rates of eco growth.
raising the school leaving age to 18 years old
an increase in the rate of labour productivity growth
a fall in the labour force participation rate
an increase in the number of part-time workers
24
Which one is least likely to increase aggregate supply in the economy?
increased government spending on infrastructure
increased govt outlays allocated to payment of UE benefits
a reduction in company tax rates
increased government spending on education and training
25
Which one of the following is the most likely to cause cost inflation?
an increase in superannuation contributions paid by employers
the government reducing company tax rates
excess demand for goods and services
expectations by employers that interest rates will fall
26
Consider the following data for Country Y. Based on this, which statement is not true?
Over the four-year period, the general level of prices rose.
The inflation rate in 2015 was higher than it was in 2016.
The country experienced deflation in 2016 and 2017.
The country experienced deflation in 2017.
27
Which one of the following would be an example of a structurally unemployed person?
Builder who not working due to a downturn in their industry
cash register operator replaced by self-service machines.
Ski instructor needing alternative employment during summer
Accountant who has left their job to travel overseas
28
Hidden (disguised) unemployment is defined as people over the age of 15 who are:
Workers who are part-time and would prefer to be full-time.
People who are actively trying to avoid getting a job.
Discouraged workers not actively seeking employment
Australian workers who have moved overseas.
29
Here is the quarterly CPI for an economy. The annual CPI for the year ended June 2018 is:
10%
8%
11%
5%
30
Using the following table, what is the labour force participation for this economy?
50%
65%
60%
55%
31
In the 5 sector model, a ↑ in injections relative to leakages is most likely to result in:
neither a ↓ in C, AD and total incomes, nor ↑ the UE rate.
a ↓ in C, AD and total incomes, and ↑ the UE rate.
a decrease in total incomes and a rise in the UE rate.
a decrease in consumption and a decrease in levels of AD.
32
Refer to the AD and AS graph. Which one is likely to cause a shift from AS1 to AS2?
a decrease in interest rates
an increase in production costs
an increase in government spending
an increase in profitability of businesses
33
Consider this labour market of an economy. In comparing Yr 2 to Yr 1, which statement is true?
Yr 2 has a higher participation rate and a higher UE rate.
Yr 2 has a lower participation rate and a lower UE rate.
Yr 2 has a higher participation rate and a lower UE rate.
Yr 2 has a lower participation rate and a higher UE rate.

VCE Economics Unit 3 AOS 2 Flashcards | StudBud