2015 HSC Economics Exam Question Predictions

What’s our rationale for these HSC Economics exam predictions?

Essays

1. Fiscal Policy – Eco Growth & Unemployment Focus

• Macroeconomic policy has been asked as an essay has been asked 7 out of the last 8 years. It’s a large component of the course, and with policy changing each year is dynamic.

• With the Budget being controversial under Liberal government it’s remained a very topical issue. Fiscal was examined in 2014 but it was combined with Labour Market reform and it’s focus was on income distribution.

• Given Monetary policy has hardly moved in the last 18 months it makes sense a focus is placed on Fiscal. Additionally, Fiscal hasn’t been specifically asked on it’s own since 2011.

• Why economic growth and unemployment? Firstly they are both growing issues for Australian economy. Secondly, UE is examined pretty much every year alternating between SA and Essays.

• In 2014 it was examined as SA, making it’s appearance in essay question highly likely. Economic growth is usually examined every 2 years and wasn’t examined in the 2014 paper.

2. Exchange Rates – Impact of Sustained Depreciation

• Over the last 24 months Australia has experienced a sustained depreciation of the $AUD which is likely to continue as our mining sector shrinks due to falling global demand.

• It’s a topical issue and it’s only been tested as an essay in 2008, 2011 and 2013.

• Was partially tested in 1-2 questions in SA section in 2015 – so in some respects it’s an undertested component of the course.

• Generally questions have focused on impacts of fluctuations – I think given downward trend it’s likely they could ask for impact of a sustained depreciation.

• Given impact this has on trade and BOP, this may be interlinked with BOP (although potential this stands on it’s own as well)

3. CAD/BOP – Causes & Consequences

• This appeared in the 2014 Independent Paper (but it didn’t appear in the 2014 HSC) and also appeared in the 2015 Independept Paper (so they are clearly picking it as a potential!)

• It pretty much appears every single year in the paper either in Short Answer or Essays – either as focus only on BOP/CAD, or as part of external stability.

• Given it was examined in 2013 and 2014 as a Short Answer, it’s therefore likely to see this appear as a potential essay question for 2015.

• It’s also a topic issue given the ongoing consequences of slowdown in mining exports, falling export prices and TWI and falling global demand.

• Note, given the role of the $AUD this may end up being combined with an exchange rates essay.

4. Globalization & Free Trade – Impact on Australian Economy

• Free trade/protection has been asked every single year since 2007, usually alternating between SA and essays each year.

• In 2014 it was asked as a SA making it likely given this trend for it to be an essay in the 2015 paper.

• There’s also been lots of activity recently in this area with the Liberal governement pursuing Chinese free trade agreement, and recently signing a trans-pacific free trade agreement.

• As a result I think it’s highly likely the paper will examine this – more likely the focus will be on free trade as opposed to protection. So the advantages/disadvantages of free trade for the Australian economy.

5. Possible – International Organizations & Role in Globalisation

• This topic was featured in the CSSA and Independent Trials in 2013 and then it didn’t appear in the 2013 HSC paper… It also hasn’t been examined since 2008 – so it’s fairly under tested.

• I thought it would potentially appear in 2014, but it didn’t, so the longer this goes untested, the higher the odds get!

• I feel if it is examined they *may* put a spin on it – a severely under tested component of this is the role that international orgs/trade agreements play in shaping global inequalities.

Short Answers

1. Globalisation

• This has appeared in 7 of the last 8 papers – either in essays or SA. It’s been examined in more recent years as essays, particularly in 2014 as a case study essay question.

• Highly likely there will be some version of globalization in SA – potentially around inequality in the global economy, or the IBC and regional business cycle.

2. Microeconomic Reform

• This topic has appeared in 7 of the 8 past HSC exams – with a growing trend in the last 5 years for it to appear in SA (in it’s different forms – i.e. Labour Market, Deregulation etc)

• It hasn’t been tested on it’s own as MR since 2008. It’s an important part of the course, but given there has been less movement in this space at a Federal level it’s easy to see why it’s been featuring in SA.

• It’s potentially possible it will have a deregulation focus given NSW government deregulation this year of the electricity network (it’s not Federal but still relevant) and ongoing struggles of Australia Post.

• In saying this, deregulation was tested in 2013 as SA.

3. Inflation

• It’s appeared in 5 out of the 8 last HSC exams either in SA or Essays – it didn’t appear in 2008 and 2010.

• In 2013 and 2014 it was part of an essay question and was last tested as a SA in 2012 making it a potential!

• Given the generally low inflation rates, combined with heat in the housing market, and potential collapse it’s topical.

4. Monetary

• Monetary on it’s own has never been examined as a SA – it generally always has appeared either on it’s own as an essay (in earlier years 2008-2011 when monetary policy was more topical) or as part of policy mix in SA.

• Given likely that there will be a fiscal policy essay, I think there’s good potential we might see it on it’s own as a SA.

5. Possible – Exchange Rates

• This has only ever featured once in 2010 as a SA question. It generally appears ever 2 years however.

• It wasn’t examined last year (one passing reference in SA question) and I think it’s likely to feature somewhere in this paper.

• Either as a standalone essay, part of essay on BOP, or as a SA question!

DISCLAIMER

• The point of putting these predictions together is to help you prioritize and focus for your study for the HSC Economics exam.
• Obviously, there is no guarantee (or any warranties implied or otherwise) that any of the predictions (despite my best efforts) will be correct and if you rely upon these predictions, you do so at your own risk.
• As such – while it is my recommendation that it would be wise to focus on the predicted topics and write practice essays, if you really want to give yourself the best shot of a Band 6 for the HSC exam – cover everything, in crazy detail (I know this is obvious but I felt it important to reiterate!)

See this spreadsheet here for categorization of topics of essay questions and short answer questions since 2007.

All the best for your HSC!