Unit 1 - Economic decision-making

AREAS OF STUDY

Area of Study 1 – Thinking Like an Economist:

Economics has an effect on everyone, irrespective of background. In this area of study students begin to appreciate the contributions of economics as a discipline and investigate some of the factors that motivate people to act in the way they do and the consequences of their actions.

Area of Study 2 – Decision-Making in Markets:

The Australian economy uses the market-based system to allocate resources. Markets are essentially places where goods and services are bought and sold. Businesses and consumers engage in mutually beneficial transactions within the market with minimal government intervention. In this area of study, students will learn about how markets work, and will focus on how specific markets operate – such as the labour market.

Area of Study 3 - Behavioral economics

Economics is affected significantly by human behaviour. By studying behavioural economics students therefore gain an insight into the ideas and experiments of economists. Students will also investigate how the observations of behavioural economists have been used to inform policy planning and implementation by government and producers/business.

LEARNING OUTCOMES

Outcome 1 – Thinking Like an Economist:

On completion of this unit the student should be able to describe the basic economic problem, discuss the role of consumers and businesses in the economy and analyse the factors that influence decision making.  

Outcome 2– Decision-making in Markets:

On completion of this unit the student should be able to explain the role of relative prices and other non-price factors in the allocation of resources in a market-based economy. 

Outcome 3 - Behavioural Economics

On completion of this unit the student should be able to explain how behavioural economics complements traditional understandings of decision-making, and analyse the effects of behavioural economics insights on consumers and other economic agents.

Unit 2 - Economic issues and living standards 

AREAS OF STUDY

Area of Study 1 - Economic  activity

In this area of study students consider the meaning and importance of economic activity and the factors that affect economic activity. They investigate how economic growth occurs  and how it is measured, and evaluate the effects of changes in the levels of economic activity on both material and non-material living standards. Students evaluate the effects of an ever-growing economy on material and non-material living standards, and consider the costs and benefits of economic growth in terms of material and non-material living standards. They also consider alternative methods of measuring living standards.

Area of Study 2 - Applied economic analysis of local, national and international economic issues

Economic issues affect all of us, influencing our daily lives and decision-making. The rapidly changing nature of the contemporary economy means the economic issues of importance to local areas, Australia and the international economy are constantly changing and evolving.

Applied economics involves students applying insights of economic theory and key economic skills to analyse economic issues. In this area of study, students undertake an applied economic analysis by investigating two contemporary economic issues from a local, national and international perspective through an economic lens. Students investigate two of the four following current economic issues: 

• the changing labour market

• the economics of international trade

• the distribution of income and wealth

• economics and environmental sustainability.

LEARNING OUTCOMES

Area of Study 1 - Economic activity

On completion of this unit the student should be able to explain the purpose of economic activity, the distinction between material and non-material living standards and the factors that may affect levels of economic activity and growth, discuss the costs and benefits of economic growth and examine the impact of economic activity on living standards using alternative measures.

Outcome 2 - Applied economic analysis of local, national and international economic issues

On completion of this unit the student should be able to explain the factors that affect two economic issues at a local, national and international level and evaluate actions to address the issues. 

Unit 3 - Australia’s living standards 

AREAS OF STUDY

Area of Study 1 – An introduction to microeconomics: the market system, resource allocation and government intervention

In this area of study students investigate the factors that affect the level of demand and supply in markets and how these might lead to changing prices, as well as the movement of land, labour and capital resources to those areas of production that generate the most value for society. Students use models to make predictions and  consider the role of markets in achieving economic efficiency. They discuss instances where the market fails to allocate resources efficiently and evaluate whether government intervention leads to a more efficient allocation of resources in terms of maximising society’s living standards.

Area of Study 2 – Domestic macroeconomic goals

Students investigate Australia's domestic macroeconomic goals of low inflation, strong and sustainable growth and full employment. They analyse aggregate demand and supply factors that influence the goals and the performance of the Australian economy in the past 2 years. 

Area of Study 3 – Australia and the international economy

Australia is an open economy. Students examine the reasons for international trade, such as the exchange of goods and services and the movement of savings and investment capital, and how these transactions might affect living standards. Students describe how international transactions are recorded. Students analyse the effects of movements in the exchange rate, the terms of trade and changes in international competitiveness on the achievement of the domestic macroeconomic goals and living standards.

LEARNING OUTCOMES

Outcome 1: An introduction to microeconomics: the market system, resource allocation and government intervention

On completion of this unit the student should be able to analyse how markets operate to allocate resources and evaluate the role of markets and government intervention in achieving efficient outcomes.

Outcome 2:  Domestic macroeconomic goals

On completion of this unit the student should be able to analyse key contemporary factors that may have affected domestic macroeconomic goals over the past two years, evaluate the extent to which the goals have been achieved and discuss the effects on living standards.

Outcome 3: Australia and the international economy

On completion of this unit the student should be able to analyse the factors that may affect the exchange rate, terms of trade and Australia’s international competitiveness, and discuss their impact on Australia’s international transactions and the achievement of the domestic macroeconomic goals and living standards.

Unit 4 - Managing the economy

AREAS OF STUDY

Area of Study 1 – Aggregate demand policies and domestic economy stability

In this area of study students investigate Australia’s domestic macroeconomic goals supporting living standards, including strong and sustainable economic growth, full employment and low and stable inflation (price stability). Students examine how each of the goals is measured and the potential consequences associated with the level of achievement of each goal. Students identify and analyse contemporary aggregate demand and aggregate supply factors that may have influenced the level of achievement of domestic macroeconomic goals over the past two years and consider how the level of achievement of the goals may affect living standards.

Area of Study 2 – Aggregate supply policies

In this area of study students examine the role of aggregate supply policies in creating a stronger macroeconomic environment so that the domestic macroeconomic goals can be more easily achieved. They investigate the different approaches that policymakers may take to promote efficiency through productivity growth, reductions in the costs of production, and improvements in the quality and quantity of the factors of production. Students analyse how these policies may affect aggregate supply and Australia’s international competitiveness and draw conclusions about the effects of these policies on the domestic macroeconomic goals and living standards.

LEARNING OUTCOMES

Outcome 1: Aggregate demand policies and domestic economy stability

On completion of this unit the student should be able to discuss the operation of aggregate demand policies and analyse their intended effects on the achievement of the domestic macroeconomic goals and living standards.

Outcome 2: Aggregate supply policies

On completion of this unit the student should be able to discuss the operation of aggregate supply policies and analyse the effect of these policies on the domestic macroeconomic goals and living standards.