In 2020, Australia’s national minimum wage (NMW) was high. Some workers on Australian dairy farms received the NMW. Australia produces milk and soft drinks. Some people buy milk instead of soft drinks. During 2020, some dairy farms and some small firms closed down. In the same year, the value of the country’s floating foreign exchange rate increased.
(a)[2]
Identify two reasons why a government might establish an NMW.
(b)[4]
Explain two causes of a rise in the value of a country’s floating foreign exchange rate.
(c)[6]
Analyse how a rise in the price of milk could influence the revenue earned by milk producers and by soft drinks producers.
(d)[8]
Discuss whether small firms are more likely to cease trading than large firms.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Lift wages” …