Economics 2019 v1.

1
IA1 high-level annotated sample response
October 2018

Examination — combination response (25%)

This sample has been compiled by the QCAA to assist and support teachers to match evidence
in student responses to the characteristics described in the instrument-specific marking guide
(ISMG).

Assessment objectives
This assessment instrument is used to determine student achievement in the following
objectives:
1. comprehend economic concepts, principles and models of exchange rates, international
trade patterns and trade theories
3. analyse an economic issue that involves exchange rates, trade patterns and/or trade
theories
4. evaluate an economic outcome relevant to exchange rates, trade patterns and/or trade
theories.
Note: Objectives 2 and 5 are not assessed in this instrument.

172066
 Instrument-specific marking guide (ISMG)
Criterion: Part A — Comprehending
Assessment objective
1. comprehend economic concepts, principles and models of exchange rates, international
trade patterns and trade theories

The student work has the following characteristics: Marks

• accurate and detailed identification of the essential features of exchange rates,

international trade patterns and trade theories
• perceptive application of economic concepts, principles and models to exchange rates, 9−10
international trade patterns and trade theories
• precise use of economic terminology.

• effective identification of the essential features of exchange rates, international trade

patterns and trade theories
• effective application of economic concepts, principles and models to exchange rates, 7−8
trade patterns and trade theories
• effective use of economic terminology.

• adequate identification of the features of exchange rates, international trade patterns and
trade theories
• adequate application of economic concepts, principles and models to exchange rates, 5−6
international trade patterns and trade theories
• adequate use of economic terminology.

• partial identification of the features of exchange rates, international trade patterns and
international trade theories
• partial application of economic concepts, principles and/or models to exchange rates, 3−4
international trade patterns and trade theories
• narrow use of economic terminology.

• identification of aspects of exchange rates, international trade patterns and/or trade

theories
1−2
• identification of aspects of economic concepts, principles or models
• inconsistent or unclear use of terminology.

• does not satisfy any of the descriptors above. 0

Economics 2019 v1.1 Queensland Curriculum & Assessment Authority

IA1 high-level annotated sample response October 2018
Page 2 of 8
 Criterion: Part B — Analysing
Assessment objective
3. analyse an economic issue that involves exchange rates, trade patterns and/or trade theories

The student work has the following characteristics: Marks

• discerning interpretation of patterns and trends in exchange rates and/or trade data and
economic information
• discerning explanation of economic relationships involving exchange rates and/or 7−8
Australia’s place in the global economy
• perceptive use of data and economic information to support the analysis.

• effective interpretation of patterns and trends in exchange rates and/or trade data and
economic information
• effective explanation of relationships involving exchange rates and/or Australia’s place in 5−6
the global economy
• effective use of data and economic information to support the analysis.

• adequate interpretation of patterns and trends in exchange rates and/or trade data and
economic information
3−4
• adequate explanation of international trade relationships
• adequate use of data and/or economic information within the analysis.

• superficial descriptions of patterns and/or trends in exchange rates and/or trade data or
economic information
1−2
• superficial identification of elements of international trade relationships
• narrow or inconsistent use of data and/or economic information.

• does not satisfy any of the descriptors above. 0

Economics 2019 v1.1 Queensland Curriculum & Assessment Authority

IA1 high-level annotated sample response October 2018
Page 3 of 8
 Criterion: Part B — Evaluating
Assessment objective
4. evaluate an economic outcome relevant to exchange rates, trade patterns and/or trade
theories

The student work has the following characteristics: Marks

• discerning synthesis of economic ideas and/or perspectives to support the conclusion or

decision
• perceptive conclusion drawn or decision made about exchange rates, trade patterns 6−7
and/or trade theories, based on the use of relevant economic criteria
• critical economic reasoning and justification.

• effective synthesis of economic ideas and/or perspectives to support the conclusion or

decision
• effective conclusion drawn or decision made about exchange rates, trade patterns and/or 4−5
trade theories, based on the use of relevant economic criteria
• feasible economic reasoning and justification.

• description of ideas and/or perspectives that link to the conclusion or decision

• reasonable conclusion drawn or decision made, based on economic criteria/criterion 2−3
• identification of some economic reasoning.

• opinions and statements about economic ideas or unclear conclusion. 1

• does not satisfy any of the descriptors above. 0

Economics 2019 v1.1 Queensland Curriculum & Assessment Authority

IA1 high-level annotated sample response October 2018
Page 4 of 8
 Task
See the sample assessment instrument for IA1: Examination — combination response (25%)
(available on the QCAA Portal).

Sample response
Criterion Marks allocated Result

Part A — Comprehending
10 10
Assessment objective 1

Part B — Analysing
8 8
Assessment objective 3

Part B — Evaluating
7 7
Assessment objective 4

Total 25 25

The annotations show the match to the instrument-specific marking guide (ISMG) performance-
level descriptors.

Comprehending Part A: Multiple choice

[9–10]
Question A
identification of the essential features
1 B√ of international trade patterns

application of economic concepts,

2 C√ principles and models to international
trade patterns and trade theories

application of economic concepts,

3 B√ principles and models to trade theories

application of economic concepts,

principles and models to exchange
4 D√ rates, international trade patterns and
trade theories

identification of the essential features

5 A√ of exchange rates

Part A: Short response

perceptive application
of economic concepts
Question 1 (50 words)
to international trade
patterns and trade Australia has a natural endowment, or abundance of land resources such as
theories
minerals and agriculture, compared to the needs of its population, and
compares abundant trades these with Japan. Japan has a natural endowment of capital
land and capital resources and highly skilled labour that specialises in the production of
resources to needs; electronics and motor vehicles, so they export them to Australia.
links them to the
resources being traded

Economics 2019 v1.1 Queensland Curriculum & Assessment Authority

IA1 high-level annotated sample response October 2018
Page 5 of 8
 Question 2 (50 words)
Comprehending
[9–10]
Australian market for Hospitality jobs
perceptive application
of economic models
to exchange rates

Price of Australian dollars

S1
diagram is correct and P2
includes all appropriate
labels
P1
diagram clearly
annotated; text refers to D2
demand for $AUS and
impact upon price, with D1
‘all things equal’
disclaimer

uses correct economic Quantity of Australian dollars

terminology of a ‘shift’,
not a ‘movement’, in the
demand curve
The diagram shows the effect of greater tourism exports: $37million
additional spending in Australia. Demand for Australian dollars ($AUS) rises
as tourists consume more Australian goods and services, resulting in a shift
in the demand curve from D1 to D2. All things equal, this would cause an
increase in the exchange rate to P2.

Question 3 (100 words)

Dumping is where a producer sells steel in a country at an unfair price, less

accurate and detailed
identification of the than what is charged in other markets. It is an economic problem causing
essential features of damage by diverting resources and income away from the local steel
international trade producer and towards the cheaper import manufacturer who is rewarded by
patterns and trade
theories
covering at least some of their cost of production. The World Trade
Organisation advocates for free global trade – without tariffs, quotas or
accurately identifies the subsidies. An exception is allowed for dumped goods, allowing countries to
correct global
institution; includes
place a specific anti-dumping duty on imports to remove the price advantage
details about economic of the dumped steel.
features of problem
(dumping) and solutions

Question 4 (100 words)

accurate and detailed
identification of the Port infrastructure is a key economic resource because the most economical
essential features of method of global trade is by sea. Gladstone is Queensland’s largest multi-
international trade commodity port, altering patterns of trade by expanding port facilities so
patterns
greater volumes of coal can be exported.
accurately identifies the
significance of port The port has improved competitiveness of local mines by reducing transport
infrastructure; explains
significance in
costs, causing Gladstone to become a logistics hub for the significant
economic terms; resources in nearby Surat Basin. The region provides greater employment
includes specific details opportunities to workers in mineral extraction, railway and port businesses.
about Surat Basin and As income and consumption in Gladstone increases, in a flow-on effect,
proximity to Gladstone
port; identifies primary commercial, industrial and engineering businesses are attracted to the
export (coal) region.

Economics 2019 v1.1 Queensland Curriculum & Assessment Authority

IA1 high-level annotated sample response October 2018
Page 6 of 8
 Comprehending Question 5 (100 words)
[9–10]

perceptive application Chengdu is the 3rd largest Chinese car production market. It has competitive
of economic concepts advantage and economies of scale with respect to related and supported
to international trade
patterns and trade
industries (Porter’s Diamond theory of National Advantage) that are vertically
theories integrated, either forward or backward. This is because the Chengu
productive region includes car intermediate goods and components e.g.
identifies a specific electronics and cars seats, enabling cars to be produced with lower
region (Chengdu);
perceptively applies component costs, a shared skilled workforce and information flow provides
and explains the productivity and innovation benefits. This gives Chengdu a cost advantage
required element of over some manufacturing countries such as Japan or Germany where
Porter’s Diamond
Theory vertically integrated businesses are not so geographically close.

Question 6 (80 words)

accurate and detailed
identification of the
essential features of
a) Resources exports: (42-22) / 22 x 100 = 90% increase from 2008 to
international trade 2018.
patterns

accurate calculations,
No increase in manufacturing exports: 2008 and 2018 exports were the
including correct same value: $10 billion.
reading of data from the
graph (2008–2018) b) The negligible change in manufacturing exports has caused this sector
clear details of how a to become a smaller proportion of GDP, and consequently, low skilled
negligible change in manufacturing jobs to move offshore, creating domestic problems.
manufacturing exports Australian manufacturing must become more high-value added and
had major effects
focused on advanced manufacturing supply chains. One government
identifies essential policy to support this structural change is the $2.4 billion investment in
features of current Australian STEM capabilities, announced in 2018. Investment in
government policy and
links them to the research and development should provide higher paying jobs and more
specific export problem globally competitive manufacturing businesses.

Analysing [7–8]
Part B: Extended response (400–500 words)
discerning
interpretation of The movements in the $Aus exchange rate such as the downward trend
patterns and trends in
exchange rates
from $1.05 US to 75 cents US from 2012/13 to 2016/17 (Source 1) affects
relative prices of imports and exports in all industries. This positively affects
interprets significant exporting groups including farmers, manufacturers, miners and service
trends of exchange rate
and pattern of the trade
providers e.g. foreign students and tourists (Source 5). Twenty-five years of
weighted index, with consecutive economic growth suggests that the exchange rate acts as a
discerning details shock absorber as the economy adjusts to dramatic changes e.g. the 33%
discerning
fall in the $US exchange in three years to June 2015, and where it has
explanation of broadly stayed since then (Source 1). The trade weighted index measures
economic the dollar’s movements of Australia’s major trading partners. While it tracks
relationships alongside the exchange rate over the last 5 years, it shows a decline of only
clearly explains 20%, so the real impact of the exchange rate trend is less than it appears
relationship of (Source 1).
exchange rate and
trade weighted index

Economics 2019 v1.1 Queensland Curriculum & Assessment Authority

IA1 high-level annotated sample response October 2018
Page 7 of 8
 Analysing [7–8] The movement in the exchange rate has significant costs. While exporters
discerning benefit from lower exchange rates, the extended period of higher exchange
explanation of rates to June 2014 has significant impacts on the manufacturing goods in
economic the export and domestic markets. In addition to costs from the forces of
relationships
fierce globalisation competition (Source 5) impacting profits and resource
clearly explains allocations, the greatest cost of the exchange rate movements are the
relationship of structural change in the manufacturing industry. This was explicitly seen in
exchange rate to the car industry, which is now the second largest value import (a leakage
exports and imports
from Australian’s economy), and at significant short-term cost to economic
Evaluating [6–7] growth (Source 3). Further, global supply chains shifting economic growth to
countries with a competitive advantage in low skill labour resources, have
use of relevant
economic criteria contributed to higher underemployment rates of 8.6% currently at its
greatest, difference to the unemployment rate of 5.9% in 2004. However, this
costs experienced by should not impact long-term economic growth (Source 2).
manufacturing industry

Analysing [7–8]

discerning
The potential of longer term economic change is noted in the lower
interpretation of proportion of unprocessed primary goods to total merchandise exports
patterns and trends in (falling by 8 percentage points over five years to 2015/16, Source 4), and
trade data and
economic information
greater processed primary over the same period (Source 6). Consequently,
Australian exporters are achieving benefits from increasing their valued-
Evaluating [6–7] addedness in Australia, resulting in greater economic growth and
use of relevant
employment opportunities. Another significant benefit is created when
economic criteria Australia prioritises onshore processing of minerals and energy products,
instead of acting as the world’s “quarry”, through a multiplied effect on
benefits of changing economic growth.
trade patterns from
onshore processing

discerning synthesis
of economic ideas
and/or perspectives to Another potential for growth created by the changing global change patterns
support the is to ‘force’ Australia to use its skilled labour to produce more elaborately
conclusion or transformed manufactured goods (ETMs) such as more complex equipment
decision
and machinery manufacturing – including using skilled labour released from
Analysing [7–8] the car industry in recent years. Source 4 indicates ETMs have increased
marginally from 2010/11 to 2015/16 by 0.3%. However, it is the potential
discerning
interpretation of
shown in the import data that demonstrates the greater opportunity, to
patterns and trends in replace ETMs imported to Australia, which grew at 7.6% over the same
trade data period (Source 4).

Evaluating [6–7]

perceptive conclusion Therefore, given dynamic global trade patterns, Australian industry policy
drawn or decision
made about exchange should focus on the competitive advantages of skilled labour, and enable
rates, trade patterns Australia to maximise the benefits and reduce the costs of globalisation in
and/or trade theories, order to deliver long term economic growth (Source 6).
based on the use of
relevant
Analysing [7–8]
economic criteria
perceptive use of data and economic information to support the analysis throughout the
report

Evaluating [6–7]

discerning synthesis of economic ideas and perspectives applied to the analysis throughout
the report, astutely considering various import and export perspectives

critical economic reasoning and justification throughout the report

Economics 2019 v1.1 Queensland Curriculum & Assessment Authority

IA1 high-level annotated sample response October 2018
Page 8 of 8