“c03AustraliaAndTheInternationalEconomy_PrintPDF” — 2022/6/4 — 18:39 — page 282 — #68
Question 21 MC
Concerning Australia’s NFD and liabilities, which statement is false?
FS
A. The NFD is the excess of what Australia has lent overseas relative to what we have borrowed. B. The rise in official debt is partly the result of weaker economic activity and hence larger budget deficits. C. Non-official, private sector debt has risen due to the savings–investment gap and lower interest rates in some overseas countries. D. In part, our abundance of natural resources and favourable economic and social institutions help to explain the rise in our external liabilities.
O
Question 22
The aggregate demand-side or aggregate supply-side development most unlikely to cause an appreciation of the Australian dollar is:
PR O
MC
a rise in world commodity prices and the terms of trade. a recession in Japan, China and the United States. higher domestic interest rates and the relaxation of controls on the level of foreign investment. huge new discoveries of natural resources.
E
A. B. C. D.
Very strong levels of domestic economic activity usually cause a cyclical fall in the CAD. A weaker Australian dollar can actually help improve the balance of net goods. Very rapid economic growth resulting in higher inflation can cause a fall in the TWI. Foreign borrowing can tend to weaken the balance of payments current account by raising the overall value of primary income debits relative to the overall value of primary income credits.
CO RR EC
Question 24 MC
A. B. C. D.
TE
D
A. B. C. D.
Which statement is generally false for Australia?
PA
MC
G
Question 23
A lower Australian dollar is likely to lead to which of the following macroeconomic effects?
Higher cost and demand inflation, stronger economic growth and lower cyclical unemployment Lower inflation and economic growth, with higher structural unemployment Overall reduced competitiveness of domestic manufacturing industries that export and compete with imports A smaller number of overseas tourists coming to Australia and locals tending to holiday abroad, slowing down the growth in GDP and employment
Question 25
Australia’s TOT would tend to fall and be less favourable if:
N
MC
There was stronger global economic activity. There was weaker global economic activity. Global disposable income rose. There were generally less favourable growing conditions for crops worldwide.
U
A. B. C. D.
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Key Concepts VCE Economics 2 Units 3 & 4 Eleventh Edition
