Studying for the 2016 HSC Economics exam? So many stats and facts and such little time.

Well there’s good news.

Each year to help students focus their study in the week leading up the HSC economics exam we put together predicted HSC Economics exam questions based on an analysis of prior years papers, current economics events, independent trial questions and my gut!

What’s our track record like in predicting the HSC Economics exam questions?

Pretty good.

  • In 2015 HSC we successfully predicted 2/4 essay questions and 1/4 short answer topics (1 of the 4 we picked as a short answer ended up as an essay question )
  • In 2014 HSC we successfully predicted 2/4 essay questions and 2/4 short answer topics
  • In 2013 HSC we successfully predicted 2/4 essay questions and 3/4 short answer topics
  • In 2012 HSC we successfully predicted 2/4 essay questions and 3/4 short answer topics
  • In 2011 HSC we successfully predicted 3/4 essay questions
  • Since 2004 to 2015 our average is 2/4 essay questions predicted successfully!

So hopefully we can keep this track record up!

2016 HSC Economics Exam Question Predictions

Short Answers
2016 Predictions
1 Globalisation
2 Microeconomic Reform
3 Free Trade/Protection
4 Economic Growth
Possible: Monetary
2016 Predictions
1 Case Study
2 Exchange Rates
3 Unemployment
4 Macroeconomic Policy Mix on Economic Objectives
Possible: Distribution of Income & Wealth

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


1. Case Study
  • The Case Study hasn’t been asked since 2014 – it was skipped over in 2015. It was also in the 2012 exam as an essay question. So it appears a recent trend *might* be appearing where it is examined every 2nd year (e.g 2012, 2014, and 2016).
  • Prior to 2012, the trend was that from 2007 to 2012 it appeared in every exam either as a short answer or essay question. So the recent 2015 and 2013 departure in not asking it at all indicate a new trend.
  • With BREXIT occurring this year (it hadn’t happened at the time the paper was written but it was on the economic agenda) and the Rio Olympics I think it’s highly likely there will be a question looking at the impact of globalisation.
2. Exchange Rates
  • Over the last 36 months Australia has experienced a sustained depreciation of the $AUD which is likely to continue into the future as our mining sector continues to shrink due to falling global demand, and our cash rate stays at historical lows of 1.5%.
  • This year as well the $AUD has remained resistant to further depreciation, bucking economists modelling, and further creating implications for our TOT also making this recent trend topical!
  • It’s a topical issue and it’s only been tested as an essay in 2008, 2011 and 2013. So it hasn’t been tested as an essay in the last 2 years and it’s topical right now!!
  • Was partially tested in 1-2 questions in SA section in 2014 – so in some respects it’s a very under tested 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.
3. Unemployment 
  • This is an ongoing area of interest in the Australian economy, with recent reports coming out this year on the % of future jobs that will disappear due to automation and globalisation.
  • The unemployment rate has been on a downward trend, despite increasing data emerging on underemployment and time taken to find full time work. The talking point is that while in the past the UE rate could be considered a good indicator of the health of the economy, it no longer is as accurate, given that it hides a lot of underutilisation. This is also interesting in a context of monetary policy at all time historic low levels, and ongoing expansionary fiscal policy, which brings a case for the need for labour market reform/micro economic policy.
  • Unemployment is a big area of the course yet was hardly examined in the 2015 exam – it was a small part of a short answer question and hasn’t been examined as an essay since 2013. So that’s 2 years without an essay question, making this a likely choice!
  • Since 2009 it’s appeared in every single exam in some way – across short answer of essay questions, so based on this it’s going to appear in this paper, it’s just going to be a question of whether it’s a short answer or an essay (although I believe an essay given it was short answer in 2015!)
4. Macroeconomic Policy Mix on Economic Objectives
  • So this one is a bit of a catch all…Fiscal and Monetary policy are huge parts of the course, and their impacts on the economy, so it’s always likely there will be a  Discuss [Insert Type of Policy] impact on [Insert Economic Objectives] style question
  • In saying this, last year there was a Microeconomic Policy and Impact on Objectives, which suggests, this year it may be Macroeconomic Policies turn for a broad question like this! A broad Macroeconomic Policy Mix question and it’s impact on economic objectives hasn’t appeared since 2013 and then 2009 – so I feel like this is the year!
  • Often Fiscal and Monetary policy are broken up for specific questions, but with the recent ineffectiveness of Monetary policy, it’s likely they may combine them into a Macroeconomic question, and ask you to explore the impact of the ‘mix’ of these two policies.
  • This is evident by the fact that in 2015 it was asked as ‘Macroeconomic Policy on External Stability’. Furthermore, Fiscal and Monetary haven’t been asked as separate essay questions since 2011!
  • Of course, they may look to make it a Macro Policy Mix question but on specific objectives – this is where they then may focus this on UE and Income Distribution!
5. Possible – Distribution of Income & Wealth
  • This has been an under tested component of the course in recent years compared to its prevalence in earlier exams and it’s importance in the Australian economy.
  • In 2007 it was tested as short answer, it wasn’t tested in 2008 or 2009, and then was examined as an essay in 2010 and 2011, a short answer in 2012, and then in 2014 it was part of an essay question looking at impact of labour market reform and fiscal policy on income inequality.
  • So in terms of a trend, it appears that it appears and then takes 1-2 years off, before re-appearing! So this means we could see it this year (if not this year, it will be in next years!)
  • Over the last year with the election, income distribution has been on the political economic agenda in relation to the budget and tax changes, (in fact Labour put it squarely on the agenda as a core part of their policy offering as it was a position of strength for them relative to the Coalition) so this also means it was likely on the markers radars when they were writing the paper.

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Short Answers

1. Balance of Payments/External Stability
  • This is pretty much examined every single year somewhere across the HSC economics paper! It’s appeared in 9 out of the last 9 papers in some form, so this makes it a high bet that it will also appear in this years paper.
  • Last year it was examined as an essay question, and the year before as a SA question, so it’s likely it will appear as a SA question in 2016!
  • Furthermore, as highlighted earlier, this year the $AUD has remained resistant to further depreciation, bucking economists modelling, and further creating implications for our TOT and therefore our Balance of Payments. Of course, this may just end of being examined in essays part of impact of $AUD on our external stability/BOP and not a SA question as well!
  • Our terms of trade have also been on a steady decline over the last couple of years and with ongoing depreciation of the $AUD predicted ($0.67) this will continue to worsen, raising ongoing BOP concerns.
  • Finally, with the election this year a big part of the budget conversation relating to the concerns around Australia’s growing government debt and how this contributes to our national foreign debt and our BOP. In fact, the warnings have been coming thick and fast about our government debt from expasionary fiscal budgets being a ‘ticking time bomb’ making this a very relevant topic for inclusion in this years HSC economics exam!
2. Microeconomic Reform
  • This topic has appeared in 8 of the 9 past HSC economics exams – with a growing trend in the last 5 years for it to appear in SA (in its different forms – i.e. Labour Market, Deregulation etc)
  • Given the trend for it to appear in some form in pretty much every paper, it’s a strong bet for appearing in this years exam. Last year it was tested as an essay question, making it highly likely that this year it will appear as a short answer question.
  • It hasn’t been tested on it’s own as MR in short answer since 2008 – it was examined in SA with focus on Labour Markets in 2011 and with Macro policy in SA in 2014. Given as well that it was examined on its own in 2015 paper as an essay, it’s likely that it won’t be examined as ‘Microeconomic Reform’ on it’s own, but will potentially stipulate a specific type of Microeconomic policy.
  • It’s potentially possible it will have a deregulation focus given NSW government deregulation last year of the electricity network and the federal decision to block the sale on the basis of ‘national security concerns’, and the ongoing deregulation of the Australian taxi industry as a result of Uber’s entry into the market.
  • Deregulation also hasn’t been tested since 2013 (in SA), so it’s also under tested!
  • It could however also be Labour Market Reform – this was last tested in 2014 as an essay, and hasn’t been tested as a SA since 2011, also making it undertested! Given Australia’s growing casualisation of the labour force and aging population, it’s also topical!
3. Free Trade/Protection
  • It didn’t appear in the 2015 HSC economics exam, however it appeared in 2009, 2010, 2012, 2013, 2014 – so it’s appeared in 5 out of the last 7 HSC exams in either SA or Essays. So it’s commonly tested!
  • It’s almost appeared every 2nd year as a SA question, and given its frequency in past exams, and the fact it wasn’t in last years exam at all, makes it a potential for the 2016 exam in SA. It was a ‘Protection’ focused question in 2014, which may mean the focus in 2016 is on ‘Free Trade’.
  • Evidence for Free Trade being included in this years paper is that the Australian-Chinese free trade agreement came into force in December 2015 making it topical. Additionally, with US Elections this year and Trump, free trade and protection have been topic on the global political agenda once again.
  • Furthermore, BREXIT also put free trade and protection on centre stage, with Australia beginning negotiations with the Britain for a free trade agreement while the EU warning us that we shouldn’t prioritise free trade with Britain over the EU. Note – all of this happened after the exam paper was written, but the vote of BREXIT raised these questions nevertheless at the time the markers would have been writing the paper!
4. Economic Growth
  • Generally in SA part of the HSC economics exam the trends indicate that there are 2 economic issues included. Given I’ve predicted BOP/External Stability as one, there needs to be a 2nd one!
  • Why Economic Growth?
  • I’ve predicted UE and Distribution of Income and Wealth for the essays, we’ve already covered External Stability, so this leaves 3 left – Economic Growth, Inflation and the Environment.
  • Given Inflation and Environment were both covered as SA questions in the 2015 paper, I don’t think they are likely this year! So by a process of elimination, Economic Growth is left!
  • But beyond this, why else do I believe it will be examined as a SA question?
  • Economic Growth hasn’t been examined as a SA since 2013, and then prior to that in 2008. So it’s undertested in SA. It was however examined last year in 2015 as part of essay question.
  • Furthermore, we are experiencing our fastest growth in 4 years, and are reaching a global record for longest period of economic growth this year – yet we aren’t without our challenges, from stagnant wage growth (and generally low inflation), a hot housing market, and unsustainable government expenditure (likely propping up our growth), making this a very relevant topic for this years paper.
5. Possible – Monetary
  • Since 2007, Monetary on it’s own has never been examined as a SA – it generally always has appeared either in an essay (on it’s own in earlier years 2008-2011 when monetary policy was more topical and since then as part of a macroeconomic policy mix question) or as part of policy mix in SA.
  • Additionally, since 2007, out of the SA questions each year, the trend is that they have never picked 2 economic policy questions to feature in SA – and given I’ve predicted MR as a SA question, by predicting Monetary as well, I’m bucking this trend right?
  • So why am I predicting it?
  • Yes, I’m taking a risk in predicting this, but here’s why I think it’s a good chance (although it may simply appear in essays instead!)
  • Fiscal was tested on it’s own in SA last year and in 2009 – because Monetary has NEVER been tested in SA, I believe this means it’s likely they may look to examine it this year.
  • Additionally, the RBA further lowered the cash rate this year  to historic lows of 1.5%, drawing comparisons to the US and Japanese economies and their ongoing challenges in using Monetary policy to stimulate the economy.
  • Additionally with many major big banks refusing to pass the cuts on to consumers this has also created challenges for RBA to effect change in the economy bringing into question the effectiveness of monetary policy.
  • Furthermore, the competing forces in the Australian economy right now of falling mining boom impacting WA and QLD economies, a housing boom and upward pressure on house prices in the East Coast, yet low inflation, and soft future economic growth projections makes monetary policies relevance interesting!
  • This context, and the historical lows have also called into question the future of a 2-3% low inflation target.
  • Finally, the process of how cash rate is set and passed onto to the economy hasn’t been examined in a LONG TIME which means given this context, it’s likely it may be examined in 2016!

2007 – 2015 HSC Economics Exam Questions by Topic

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


  • 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 economics exam – cover everything, in crazy detail (I know this is obvious but I felt it important to reiterate!)

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All the best for your HSC!


Rowan is the founder of Art of Smart Education, an award winning provider of 1 on 1 tutoring and mentoring. Rowan has spent the last 8 years conducting research with thousands of Australia’s top students who scored ATAR’s of over 98 and is the author of Secrets of HSC Success Revealed. Rowan has 10 years experience in tutoring and delivers workshops across Australia on excelling academically at school. Rowan’s videos on YouTube have been watched more than 1,000,000+ times.


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