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Year 12 - Economics (ATAR)

Lessons

12 lessons

  1. Australia's International Trade & Global Linkages Australia's linkages with the world through trade, investment, tourism and immigration; the extent and importance of trade; the composition and direction of Australia's trade; and trade policy, including regional and bilateral free trade agreements.
  2. Free Trade & Protection: Comparative Advantage, Tariffs & Subsidies Absolute and comparative advantage and the sources of comparative advantage; the gains from specialisation and trade using the demand and supply model, the PPF model and opportunity cost; the benefits of trade liberalisation; types of protection (tariffs, subsidies, quotas); arguments for protection; and the impact of tariffs and subsidies using the demand and supply model on trade, market efficiency and the macroeconomy.
  3. The Balance of Payments: Structure, the Current Account & the Savings–Investment Gap The concept and structure of Australia's balance of payments and the double-entry system; the reasons for Australia's current account balance in terms of the trade balance and the income balance; the current account balance and the savings/investment gap; and trends in Australia's current account and financial account over the last ten years.
  4. The Terms of Trade: Index, Commodity Prices & Their Effects The concepts of the terms of trade and the terms of trade index; factors that affect the terms of trade, including changes in commodity prices; trends in Australia's terms of trade over the last ten years; and the effects of changes in Australia's terms of trade.
  5. Exchange Rates: Determination, Movements & Effects The concept of an exchange rate, including Australia's exchange rate and the trade weighted index; the relationship between the balance of payments and the exchange rate; the determination of, and movements in, the exchange rate using the demand and supply model; the factors that affect the exchange rate; the effects of movements; and trends in Australia's exchange rate over the last ten years.
  6. Foreign Investment: FDI vs Portfolio, the CA Link & the IIP The concept of foreign investment and Australia's investment flows; the distinction between foreign direct and portfolio investment; the link between foreign investment and the current account balance; trends over the last ten years; the benefits and costs of foreign investment; and Australia's foreign assets, foreign liabilities and international investment position.
  7. The Business Cycle: Phases, Trend & Indicators The concept of the business cycle and its phases (expansion, peak, contraction, trough); fluctuations in economic activity around the long-term trend; the role of aggregate demand in driving the cycle; and the key macroeconomic indicators used to identify the phase of the cycle.
  8. The Aggregate Expenditure Model & the Multiplier The components of aggregate expenditure (C + I + G + (X − M)) and their determinants; the consumption function, MPC and MPS; the aggregate expenditure model and macroeconomic equilibrium including the role of inventories; the multiplier and the multiplier process; and the impact of a change in an AE component on equilibrium income and output.
  9. The Aggregate Demand & Aggregate Supply Model The aggregate demand (AD) curve and the factors that cause movements along and shifts of it; the short-run aggregate supply (SRAS) curve and its movements and shifts; the long-run aggregate supply (LRAS) curve and its shifts; macroeconomic equilibrium in the AD/AS model; the impact of changes in aggregate demand and aggregate supply on equilibrium; and the use of the AD/AS model to explain the business cycle.
  10. Fiscal Policy: Stance, the Budget & Effects on AD The concept of fiscal policy and government economic objectives; balanced, surplus and deficit budgets; planned versus actual budget outcomes; financing a deficit and government debt; automatic stabilisers versus discretionary fiscal policy; expansionary and contractionary fiscal stances through the AE and AD/AS models; the strengths and weaknesses of fiscal policy; and recent Australian fiscal stances.
  11. Monetary Policy: The Cash Rate & the Transmission Mechanism The concept of monetary policy and the cash rate; the RBA's objectives; conventional and unconventional monetary policy; when and why the RBA changes its stance; the monetary policy transmission mechanism; expansionary and contractionary stances through the AE and AD/AS models; the strengths and weaknesses of monetary policy; and recent Australian monetary policy stances.
  12. Labour Productivity & Long-Run Growth The importance of long-run economic growth; the concept of labour productivity; factors affecting productivity growth (human capital, capital deepening, technological progress); government policies to raise productivity; and the impact of productivity changes shown through the AD/AS model (a rightward shift of LRAS) and the Aggregate Production Function.