economics_examrep18.pdf - 2018 VCE Economics written...

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© VCAA 2018 VCE Economics written examination report General comments Students generally performed well in Section A, the multiple-choice section of the examination. The majority of students also attempted all questions in Section B, which indicates that most students managed their time effectively. Many responses were of high quality. These responses answered questions both directly and precisely and used economics language and terminology accurately. Many high-quality answers also showed, where appropriate, current knowledge of the performance of the Australian economy. The main areas identified for potential improvement by students were in demonstrating clearer and deeper understanding of each of the following: the distinction between a budget deficit and a current account deficit the meaning of market failure and how the existence of externalities and asymmetric information may contribute to market failure how and why the government may respond to market failure the meaning and differences between the various types of efficiencies, such as allocative efficiency and dynamic efficiency the transmission mechanisms of monetary policy and their influence on the level of aggregate demand, including savings and investment, cash flow, availability of credit, exchange rate movements and asset prices evaluating the strengths and weaknesses of aggregate demand policies in achieving the Australian Government’s domestic macroeconomic goals how the following aspects of budgetary policy are designed to influence aggregate supply and the achievement of domestic macroeconomic goals: spending on training and education research and development grants subsidies how welfare and tax reform policies are designed to influence aggregate supply the effect of immigration policies on the labour market and on aggregate supply and the way in which this influences the achievement of domestic macroeconomic goals the strengths and weaknesses of using aggregate supply policies to achieve the Australian Government’s domestic macroeconomic goals.
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