Year 12 - Economics (ATAR)

Components

12 components

C01-U3T1 Australia's international trade Linkages through trade, investment, tourism and immigration; the extent and importance of trade; composition and direction of trade; trade policy and free trade agreements.
C02-U3T2 Free trade and protection Absolute and comparative advantage; gains from specialisation and trade via demand & supply, PPF and opportunity cost; trade liberalisation; tariffs, subsidies and quotas; arguments for protection; impact of tariffs and subsidies.
C03-U3T3 Balance of payments Concept and structure of the balance of payments; double-entry recording; current account drivers (trade balance, income balance); current account balance and the savings/investment gap; ten-year trends.
C04-U3T4 Terms of trade Concepts of the terms of trade and the terms of trade index; factors affecting the terms of trade including commodity prices; ten-year trends; effects of changes in the terms of trade.
C05-U3T5 Exchange rates Concept of an exchange rate and the trade weighted index; relationship between the balance of payments and the exchange rate; determination and movements via demand & supply; factors affecting the exchange rate; effects of movements; ten-year trends.
C06-U3T6 Foreign investment Concept of foreign investment and Australia's investment flows; foreign direct vs portfolio investment; link to the current account balance; ten-year trends; benefits and costs; foreign assets, liabilities and the international investment position.
C07-U4T1 Macroeconomic performance and the business cycle Causes and turning points of the business cycle; the relationship between the business cycle and economic indicators; trends in Australia's macroeconomic performance over the last ten years.
C08-U4T2 The aggregate expenditure model Components of AE = C + I + G + (X − M) and their determinants; consumption function, MPC and MPS; the AE model and macroeconomic equilibrium including inventories; the multiplier and the multiplier process; impact of changes in AE components on equilibrium income/output.
C09-U4T3 The aggregate demand and aggregate supply model The AD curve and its movements/shifts; the SRAS curve and its movements/shifts; the LRAS curve and its shifts; macroeconomic equilibrium using AD/AS; the impact of changes in AD and AS on equilibrium; using AD/AS to explain the business cycle.
C10-U4T4 Fiscal policy Concept of fiscal policy and government objectives; balanced, surplus and deficit budgets; planned vs actual outcomes; financing a deficit and government debt; automatic stabilisers vs discretionary policy; expansionary and contractionary stances via AE and AD/AS; strengths and weaknesses; recent Australian stances.
C11-U4T5 Monetary policy Concepts of monetary policy and the cash rate; RBA objectives; conventional and unconventional monetary policy; when the RBA changes stance; the transmission mechanism; expansionary and contractionary stances via AE and AD/AS; strengths and weaknesses; recent Australian stances.
C12-U4T6 Labour productivity and long-run growth Importance of long-run economic growth; concept of labour productivity; factors affecting productivity growth (human capital, capital deepening, technological progress); government policies; impact of productivity changes via the AD/AS model and the Aggregate Production Function.