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  1. Introductory concepts
  2. Market mechanism
  3. Elasticities  
  4. Market structures
  5. Market failures
  6. Macro activity/eco growth
  7. Inflation
  8. Employment & unemployment
  9. External Stability
  10. Income distribution
  11. Factors affecting economy
  12. Fiscal/Budgetary policy
  13. Monetary Policy
  14. Aggregate Supply Policies
  15. The Policy Mix
  16. Course revision


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 Course notes quick navigation

1 Introductory concepts 2  Market mechanism  3 Elasticities  4 Market structures 5  Market failures  6  Macro economic activity/eco growth  7 Inflation 8  Employment & unemployment  9  External Stability  10  Income distribution 11.Factors affecting economy  12  Fiscal/Budgetary policy  13  Monetary Policy   14 Aggregate Supply Policies  15 The Policy Mix

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How you are marked


The maximum score for each question is 100%. For every hint used, your percentage score is reduced by the ratio of that letter to the total letters required in the answer. For example, if the total number of letters within the gaps is 50 across the whole response, then each letter is worth 2 percentage points. Each hint will therefore reduce your score by 2 percentage points.


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1. Distinguish the terms of trade from the current account balance. 3 marks

2. Describe a factor that might explain the strong growth in the terms of trade in Australia. 2 marks

3. Explain how a depreciation of the AUD is likely to affect the Balance on Goods and Services within the current account. 4 marks

4. Define international competitiveness. 2 marks

5. Explain how an increase in international competitiveness is likely to impact on the achievement of external stability. 4 marks

6. Explain how higher commodity prices might affect the current account balance. 3 marks

7. Explain the difference between the balance of (merchandise) trade and the terms of trade. 4 marks

8. Explain how higher global commodity prices and higher domestic interest rates affect the value of the Australian dollar. 4 marks

9. Explain how a higher exchange rate is likely to impact on both the Balance on Goods and Services and the net primary income sections of the current account. 6 marks

10. Explain the likely effect of a major drought on the current account balance and the exchange rate. 4 marks