100 marks · an original Intuition practice paper realising the consensus predictions — every question links to the evidence behind it. Prefer the PDF?
This full-length practice paper was built from the consensus of a six-model AI panel (fable, opus, gpt-5.6-sol, gemini-3.1-pro, grok, deepseek), each of which independently predicted the 2026 examination from the 2019–2025 papers and NESA marking feedback. The 145 question-level predictions were clustered; every cluster with consensus probability ≥ 0.55 is realised in this paper, the remainder is drawn from the panel's watch list, and distribution of income and wealth is deliberately light in line with the panel's rested call. Each question is tagged in the provenance table with the consensus cluster it realises and the probability that a question of that kind appears in 2026. Every question is original — none is copied from a past paper.
General instructions
20 marks — Attempt Questions 1–20 — Allow about 35 minutes for this section
Use the multiple-choice answer sheet for Questions 1–20.
An economy experiencing a sudden currency crisis is unable to meet its short-term foreign debt obligations.
Which organisation is most likely to provide emergency financial assistance to this economy?
The table shows selected indicators for Country Z.
| Indicator | Value |
|---|---|
| GNI per capita (US$) | 58 400 |
| Human Development Index | 0.94 |
| Services share of output | 78% |
How is Country Z best classified?
Two economies agree to remove tariffs and quotas on each other's goods and services. The agreement has no other members.
What is this an example of?
Which of the following describes how the Reserve Bank of Australia keeps the cash rate close to its target under its current operating system?
Which of the following would shift an economy's aggregate demand curve to the right?
The table shows national income and consumption for an economy over two years.
| Year | National income ($m) | Consumption ($m) |
|---|---|
| 1 | 800 |
| 2 | 900 |
Planned investment then rises by $30 million.
What is the new equilibrium level of national income?
The table shows nominal GDP and the consumer price index for an economy.
| Year | Nominal GDP ($b) | CPI |
|---|---|---|
| 1 | 2000 | 110.0 |
| 2 | 2120 | 113.3 |
What is the approximate rate of real economic growth between Year 1 and Year 2?
In one quarter, a cyclone sharply reduces fruit supply, and at the same time wages grow strongly across most industries.
Which row correctly identifies the measure of inflation mainly affected by each event?
| Cyclone-driven fruit price rise | Broad-based wage growth | |
|---|---|---|
| A. | Headline | Underlying |
| B. | Underlying | Headline |
| C. | Headline | Headline |
| D. | Underlying | Underlying |
The table shows labour market data for an economy.
| Millions of persons | |
|---|---|
| Working-age population | 20.0 |
| Employed | 13.3 |
| Unemployed | 0.7 |
What is the unemployment rate?
Which of the following would cause a fall in the participation rate?
The table shows leakages and injections for an economy ($ billion).
| Savings | Taxation | Imports | Investment | Government spending | Exports |
|---|---|---|---|---|---|
| 40 | 60 | 50 | 45 | 65 | 30 |
Which row correctly describes this economy?
| National income | Trade in goods and services | |
|---|---|---|
| A. | Rising | Surplus |
| B. | Rising | Deficit |
| C. | Falling | Deficit |
| D. | Falling | Surplus |
A government's budget outcome changes from a deficit of \$40 billion to a deficit of \$15 billion, with no change in the economy's cyclical position.
What does this change represent?
The table shows balance of payments data for an economy with a floating exchange rate ($ billion).
| Item | Balance |
|---|---|
| Balance on goods and services | +25 |
| Net primary income | −60 |
| Net secondary income | −5 |
| Capital account | +2 |
| Financial account | ? |
What is the balance on the financial account?
A migrant working in Australia regularly sends money to family members overseas.
How is this transaction recorded in Australia's balance of payments?
The table shows an economy's international investment position ($ billion).
| Value | |
|---|---|
| Foreign debt owed by residents | 1200 |
| Debt owed to residents by non-residents | 400 |
| Domestic assets owned by non-residents | 1100 |
| Foreign assets owned by residents | 900 |
What is the economy's level of net foreign liabilities?
An economy's export price index is 110 and its import price index is 125.
What is its terms of trade index?
The table shows the currency weights in an economy's Trade Weighted Index.
| Currency | Weight (%) |
|---|---|
| Chinese renminbi | 31 |
| Japanese yen | 13 |
| European euro | 9 |
| US dollar | 8 |
Which pair of equal-percentage movements would cause the TWI to fall?
The Reserve Bank of Australia lowers the cash rate target.
Which row identifies the most likely effects?
| Asset prices | Australian dollar | |
|---|---|---|
| A. | Rise | Appreciates |
| B. | Rise | Depreciates |
| C. | Fall | Depreciates |
| D. | Fall | Appreciates |
Use the following information to answer Questions 19 and 20.
domestic demand and supply diagram for a good with a world price of \$4 per unit. With a \$2 per-unit tariff (domestic price \$6): domestic demand 65 million units, domestic supply 50 million units. The tariff is then reduced to \$1 per unit (domestic price $5): domestic demand 80 million units, domestic supply 40 million units.
What is the government's tariff revenue after the tariff is reduced?
What is the change in the revenue received by foreign producers as a result of the tariff reduction?
40 marks — Attempt Questions 21–24 — Allow about 1 hour and 15 minutes for this section
Answer the questions in the spaces provided.
(a) Distinguish between economic growth and economic development. (2 marks)
(b) Country X, a major destination for Australian exports, raises its average tariff on imported goods from 5% to 20%.
frame against the United States tariff round current at publication — as at August 2026 that is a 10% baseline tariff on most Australian goods, 50% on steel and aluminium (raised from 25% in June 2025), and the 6 April 2026 Section 232 change assessing the tariff on the full customs value rather than metal content. Direct exposure is small: the US takes about 6% of Australia's gross exports, roughly 1.5% of GDP. Verify scope and rates at publication.
Explain how increased protection by Australia's trading partners could affect the components of Australia's current account. (3 marks)
(c) Examine TWO reasons for differences in living standards and economic development between nations. (5 marks)
The table shows hypothetical balance of payments data for Australia ($ billion).
| Item | Balance |
|---|---|
| Balance on goods and services | +18 |
| Net primary income | −52 |
| Net secondary income | −4 |
| Capital account | +1 |
| Financial account | +37 |
(a) Using the table, calculate the balance on Australia's current account. Show your working. (2 marks)
(b) Explain how the Australian dollar can appreciate against the US dollar while depreciating against the Trade Weighted Index. (3 marks)
(c) With reference to the table, explain how sustained surpluses on the capital and financial account can lead to growing net primary income debits over time. (5 marks)
diagram of the market for electricity generated from fossil fuels, showing the demand curve and the private cost (supply) curve, with equilibrium at quantity Qm. Space is provided on the diagram for an additional curve.
(a) On the diagram, draw and label the social cost curve for this market. (1 mark)
(b) Explain why the market equilibrium quantity exceeds the socially optimal quantity in this market. (2 marks)
(c) Explain how a per-unit tax on producers can internalise a negative externality. (3 marks)
(d) Assess the effectiveness of ONE market-based environmental policy used in Australia compared with direct regulation. (4 marks)
The table shows hypothetical data for the Australian economy.
| Year 1 | Year 2 | |
|---|---|---|
| Budget outcome ($ billion) | −35 | −12 |
| Unemployment rate (%) | 6.0 | 4.6 |
| Real GDP growth (%) | 1.2 | 3.1 |
(a) With reference to the table, outline how automatic stabilisers have contributed to the change in the budget outcome. (2 marks)
(b) Explain ONE consequence of financing a budget deficit by issuing bonds to the private sector. (3 marks)
(c) Explain how ONE microeconomic or labour market policy could increase productivity and reduce cost inflation in Australia. In your answer, refer to a specific product market or labour market. (5 marks)
20 marks — Attempt either Question 25 or Question 26 — Allow about 35 minutes for this section
Answer the question in a writing booklet.
Your answer will be assessed on how well you:
Evaluate the effectiveness of fiscal policy in achieving economic growth and external stability in Australia. In your answer, refer to the information provided.
short excerpt from a recent Australian Government Budget Paper on the return of the budget to deficit after the 2022–23 and 2023–24 surpluses — insert a verified excerpt at publication.
chart of the Australian Government underlying cash balance as a percentage of GDP, 2016–17 to 2025–26, showing widening deficits through the pandemic, back-to-back surpluses in 2022–23 and 2023–24, and a return to deficit thereafter. Final Budget Outcome figures: 2022–23 surplus +\$22.1 billion (0.9% of GDP); 2023–24 surplus +\$15.8 billion (0.6%); 2024–25 deficit −\$27.9 billion (1.0%). Confirm the 2025–26 outcome at publication.
OR
Assess the impact of movements in the terms of trade and the exchange rate on Australia's external stability. In your answer, refer to the information provided.
short excerpt from RBA or Treasury commentary on movements in the terms of trade and their implications for the current account — insert a verified excerpt at publication. As at August 2026 the terms of trade sit well below their 2021–22 peak but rose 1.1% to 96.4 in the March quarter 2026, so frame this as movement in both directions rather than a one-way decline.
dual-series chart of Australia's current account balance as a percentage of GDP and net foreign liabilities as a percentage of GDP, 2016 to 2026, showing the current account moving from the 2019–23 surplus era back into deficit while net foreign liabilities decline then stabilise. The deficit widened to $27.1 billion in the March quarter 2026, and the balance on goods and services fell into deficit that quarter for the first time since the December quarter 2017 — verify against the ABS balance of payments release current at publication.
20 marks — Attempt either Question 27 or Question 28 — Allow about 35 minutes for this section
Answer the question in a writing booklet.
Your answer will be assessed on how well you:
Evaluate the impact of globalisation on economic growth and economic development in an economy other than Australia.
OR
Analyse the causes of inflation in Australia and its effects on individuals, firms and the government.
| Q | Answer | Note |
|---|---|---|
| 1 | B | IMF provides crisis liquidity; World Bank funds development; WTO settles trade disputes |
| 2 | A | High income, very high HDI, service-dominated output ⇒ advanced |
| 3 | B | Two members only ⇒ bilateral; a customs union adds a common external tariff |
| 4 | C | Ample reserves system: interest on ES balances sets a floor just below target |
| 5 | A | Confidence lifts C (AD); B and D are aggregate supply factors; C reduces AD |
| 6 | C | MPC = ΔC/ΔY = 80/100 = 0.8 ⇒ k = 5; ΔY = 5 × 30 = 150; new Y = 900 + 150 = $1050m. A omits k; B inverts MPC/MPS; D is the change, not the level |
| 7 | A | Nominal growth 6.0%, inflation 3.0%; real growth = 1.06/1.03 − 1 ≈ 2.9%. Subtracting (6.0 − 3.0 = 3.0) is the standard approximation and is deliberately NOT offered — the intended discriminator is whether the deflator is applied. B is the wrong-base error |
| 8 | A | Volatile one-off ⇒ headline only; broad persistent pressure ⇒ underlying |
| 9 | B | Labour force = 13.3 + 0.7 = 14.0m; 0.7/14.0 = 5.0%. A divides by working-age population |
| 10 | A | Discouraged workers leave the labour force; D raises participation |
| 11 | C | Leakages 150 > injections 140 ⇒ income falling; X 30 < M 50 ⇒ trade deficit |
| 12 | C | Stance is the change in the outcome — a shrinking deficit is contractionary |
| 13 | A | CA = 25 − 60 − 5 = −40; KAFA = +40; FA = 40 − 2 = +$38b. B omits the capital account |
| 14 | B | Remittances are current account, secondary income |
| 15 | A | NFL = (1200 − 400) + (1100 − 900) = 800 + 200 = $1000b. B nets only debt |
| 16 | A | ToT = 110/125 × 100 = 88.0; B inverts the ratio |
| 17 | B | The renminbi's 31% weight dominates the US dollar's 8% — depreciation against the heavier partner pulls the TWI down |
| 18 | B | Lower rates lift asset prices (present-value/borrowing channels) and reduce capital inflow ⇒ depreciation |
| 19 | B | Imports after = 80 − 40 = 40m units × $1 = $40m. C uses pre-change values; D taxes all consumption |
| 20 | A | Foreign revenue valued at the WORLD price: before 15m × $4 = $60m; after 40m × $4 = $160m; change = +$100m. B values at domestic prices; C is the level, not the change |
Q21 (a). Growth = increase in real GDP (volume of goods and services); development = broader improvement in wellbeing/quality of life (health, education, income distribution — HDI-type indicators). Both sides needed for 2. (b). Higher tariffs in Country X reduce demand for Australian exports ⇒ BOGS credits fall ⇒ balance on goods and services deteriorates; a full chain to a second component (e.g. weaker export income reduces profits remitted, or slower growth reduces primary income flows) earns the third mark. One-component answers cap at 2 (the 2024 Q21(c) complaint). (c). TWO genuinely distinct reasons (e.g. resource endowment vs institutional quality/access to capital vs global trade access), each linked to living standards or development outcomes with an indicator; blended or overlapping reasons cap the mark (2019/2024 feedback).
Q22 (a). CA = 18 − 52 − 4 = −\$38 billion (deficit). Consistency check: CA (−38) + capital (+1) + financial (+37) = 0 ✓. (b). The TWI weights each currency by its share of trade; the US dollar carries a single-digit weight. If the AUD rises against the USD but falls against heavier partners (especially the renminbi), the weighted average falls. Naming the weighting mechanism is the discriminator — "TWI is a basket like the CPI" scores nothing (2019/2021 feedback). (c). Chain required: financial account credits = foreign investment/lending into Australia ⇒ a growing stock of foreign-owned assets and debt ⇒ servicing obligations (interest, dividends, repatriated profits) recorded as primary income DEBITS in later periods ⇒ the table's −\$52b NPY deficit is the flow cost of past KAFA surpluses (+$38b). Restating CA + KAFA = 0 without the causal chain caps at 2 (2023/2025 feedback).
Q23 (a). Social cost curve above/left of the private cost curve (production externality). Curve drawn the wrong side scores 0. (b). Producers face only private costs; the external cost (pollution) is not in their supply decision, so price is too low and Qm > Q socially optimal. (c). A per-unit tax equal to the marginal external cost shifts private cost up toward social cost ⇒ price rises, quantity falls to the socially optimal level ⇒ the externality is priced into the producer's decision ("internalised"). (d). ONE named Australian market-based policy (e.g. the Safeguard Mechanism as a baseline-and-credit scheme — baselines declining 4.9% a year to 2030 under the 2023 reforms, with the 2026–27 review now under way to set the rate beyond 2030, which is itself a fair limitation to raise; a container deposit scheme such as NSW Return and Earn; water entitlement trading — confirm scheme details current at publication) assessed with a criterion (behaviour change, least-cost abatement, coverage) AND an honest limitation, compared against regulation (certainty of outcome vs allocative inefficiency). Offering a regulation or target as "market-based" caps at 1 — the exact 2021/2024 trap.
Q24 (a). As growth recovered and unemployment fell (6.0% → 4.6%), tax receipts rose and unemployment benefit payments fell automatically, narrowing the deficit (−35 → −12) without discretionary change. (b). Bond sales to the private sector increase demand for the economy's savings ⇒ upward pressure on interest rates ⇒ some private investment crowded out (full chain to the consequence, not just "crowding out" named). (c). A named reform in a named market (e.g. competition reform in electricity retailing; a training/skills program in the construction labour market; enterprise bargaining in a named industry) traced: reform ⇒ efficiency (technical/allocative/dynamic) ⇒ productivity ⇒ lower unit labour costs ⇒ aggregate supply shifts right ⇒ cost inflation eases. The chain is marked, not the description; no named market caps at 3 (2020 Q24(b) feedback).
Q25. Top band: stance interpreted from the CHANGE in the budget balance across the chart (deficits → surpluses → deficits), automatic vs discretionary components separated; growth mechanism (G, transfers, multiplier) AND external stability mechanism (deficits → borrowing → NFL/NPY servicing; or twin-deficits logic with its limits) both developed; limitations (implementation lag, political constraint, crowding out); a sustained judgement of effectiveness against both objectives; stimulus integrated, not restated — a chart turning point must be used. Mid band: accurate one-objective treatment or stimulus quoted but not interpreted. Answers using stale budget-era data cap below the top band (the 2019 Q25 error).
Q26. Top band: ToT MOVEMENTS traced to BOGS and the current account — credit either direction, provided the mechanism is right; as at August 2026 the terms of trade sit well below their 2021–22 peak but rose in the March quarter, so do not require a one-way decline; exchange rate channel including the valuation effect on foreign-currency-denominated liabilities and J-curve timing; external stability measured (CAD % GDP, NFL % GDP, debt servicing ratio) — credit candidates who cite the March quarter 2026 move of the balance on goods and services into deficit, its first since the December quarter 2017, with the current account deficit widening to $27.1 billion; a cyclical-vs-structural judgement — strongest answers engage the Pitchford/'consenting adults' view that market-driven CADs need not be a policy problem, then qualify it. Explaining causes of exchange-rate movements instead of their impacts is the 2020 Q25 error and caps mid-band.
Q27. Top band: a named economy other than Australia (developing/emerging choices give the richest evidence — advanced-economy choices were named as weak in 2019 feedback); globalisation mechanisms (trade and financial flows, TNCs, international business cycle) linked to BOTH growth evidence AND development evidence (HDI, life expectancy, literacy, poverty rates), with costs (inequality, environment, volatility) and a sustained evaluation. GDP-only answers cap mid-band — the most repeated feedback item in the pack (2019–2025).
Q28. Top band: at least two cause types (demand-pull, cost-push, imported/inflationary expectations) with Australian context, then effects organised BY STAKEHOLDER: individuals (real incomes, savers vs borrowers, bracket creep), firms (menu/planning costs, wage–price spiral, international competitiveness), government (indexed payments, policy response and its trade-offs) — the 2022 Q27 frame. Listing causes without the three-group effects analysis was the 2022 complaint and caps mid-band.
contemporary figures to be verified against ABS/RBA at publication. As at August 2026 the shape is the post-2022 peak, a moderation through 2024, then a renewed pick-up: CPI 4.6% over the year to March 2026, 3.8% to June and 3.5% to July, with trimmed mean 3.6% — still above the 2–3% band. Do not frame this as a return to the band.
| Paper item | Prediction | Agreement |
|---|---|---|
|
Section I Q1 ↑ Q1 |
watch list | 0.72 · 4 (fable, opus, gpt-5.6-sol, grok) |
|
Section I Q2 ↑ Q2 |
topic-level consensus | 0.75 (grok) · 2 (grok, gpt-5.6-sol) |
|
Section I Q3 ↑ Q3 |
topic-level consensus | 0.35 (fable) · 2 (fable, gpt-5.6-sol) |
|
Section I Q4 ↑ Q4 |
watch list | 0.25–0.55 · 3 (opus, gemini-3.1-pro, deepseek) |
|
Section I Q5 ↑ Q5 |
topic-level consensus | 0.70 (fable) · 1 (fable) |
|
Section I Q6 ↑ Q6 |
eco-q3-multiplier-mc | 0.76 · 6 (all) |
|
Section I Q7 ↑ Q7 |
watch list | 0.85 (fable), 0.70 (opus) · 4 |
|
Section I Q8 ↑ Q8 |
eco-q8-headline-underlying-inflation | 0.62 · 5 (fable, opus, gpt-5.6-sol, grok, deepseek) |
|
Section I Q9 ↑ Q9 |
eco-q5-labour-force-calculation-mc | 0.74 · 5 (fable, opus, gpt-5.6-sol, grok, gemini-3.1-pro) |
|
Section I Q10 ↑ Q10 |
topic-level consensus | 0.55 (opus) · 2 (opus, gpt-5.6-sol) |
|
Section I Q11 ↑ Q11 |
topic-level consensus | 0.50 (opus) · 2 (opus, fable) |
|
Section I Q12 ↑ Q12 |
eco-q7-fiscal-stance-stabilisers | 0.63 · 6 (all) |
|
Section I Q13 ↑ Q13 |
eco-q4-bop-balancing-item-mc | 0.73 · 6 (all) |
|
Section I Q14 ↑ Q14 |
topic-level consensus | 0.55 (grok) · 2 (grok, gpt-5.6-sol) |
|
Section I Q15 ↑ Q15 |
watch list | 0.60 · 4 (fable, opus, gpt-5.6-sol, grok) |
|
Section I Q16 ↑ Q16 |
topic-level consensus | 0.70 (fable) · 2 (fable, opus) |
|
Section I Q17 ↑ Q17 |
watch list | 0.45 (opus) · 5 formats scattered |
|
Section I Q18 ↑ Q18 |
topic-level consensus | 0.70 (fable, opus) · 4 (fable, opus, gpt-5.6-sol, grok) |
|
Section I Q19–20 ↑ Q19 |
eco-q6-protection-diagram-pair | 0.69 · 5 (fable, opus, gpt-5.6-sol, grok, deepseek) |
|
Q21 (a) ↑ Q21 |
topic-level consensus | — · panel pool |
|
Q21 (b) ↑ Q21 |
watch list | 0.45 (fable), 0.40 (opus) · 2 |
|
Q21 (c) ↑ Q21 |
topic-level consensus | 0.50 (grok) · 2 (grok, gpt-5.6-sol) |
|
Q22 (a) ↑ Q22 |
eco-q4-bop-balancing-item-mc | 0.73 · 6 (all) |
|
Q22 (b) ↑ Q22 |
watch list | 0.40–0.60 · 5 (fable, opus, grok, gemini-3.1-pro, deepseek) |
|
Q22 (c) ↑ Q22 |
eco-q9-kafa-npy-link | 0.53 · 5 (fable, opus, gpt-5.6-sol, gemini-3.1-pro, deepseek) |
|
Q23 (a) ↑ Q23 |
watch list | 0.35 (opus) · 4 (opus, grok, gemini-3.1-pro, deepseek) |
|
Q23 (b)–(d) ↑ Q23 |
eco-q11-env-market-based-vs-regulation | 0.51 · 6 (all) |
|
Q24 (a) ↑ Q24 |
eco-q7-fiscal-stance-stabilisers | 0.63 · 6 (all) |
|
Q24 (b) ↑ Q24 |
topic-level consensus | 0.55 (opus), 0.62 (grok) · 4 |
|
Q24 (c) ↑ Q24 |
eco-q10-micro-productivity-chain | 0.51 · 6 (all) |
|
Q25 ↑ Q25 |
eco-q1-fiscal-siii-stimulus | 0.50 · 6 (all) |
|
Q26 ↑ Q26 |
eco-q12-external-stability-synthesis | 0.49 · 4 (gpt-5.6-sol, grok, gemini-3.1-pro, deepseek) |
|
Q27 ↑ Q27 |
eco-q2-case-study-economy-returns | 0.57 · 6 (all) |
|
Q28 ↑ Q28 |
watch list | 0.52 (grok) · 3 (grok; fable and opus via trend predictions) |
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Published Aug 2026, before the exams. In November 2026 we score these predictions publicly against the real paper — per-model calibration and question-level hit rates, the same harness as the 2025 backtest. How we did it.