ECONOMICSGUIDE:DRAFT

CODE: TQA Level 3, Size Value = 15

THE COURSE DOCUMENT

This document contains the following sections:
ADVICE FOR PROVIDERS
General Advice
Course Content Guide
Resources
Formula

ADVICE FOR PROVIDERS

GENERAL ADVICE
The course content is all core (mandatory). The course is designed to have the teaching of core
content supported by the use of current examples, issues and case studies.
The course flows logically and may be taught in the sequence presented in the syllabus but is open to
significant flexibility and teachers can choose any appropriate sequence.
The concepts introduced in the first part of the course are intended to underpin the learning in Parts 2
and 3. For example the theory of the price mechanism in Part 1 is applied in several other sections of
the course such as in determining floating exchange rates.
Teachers are encouraged to use current issues thorughout the course. Teachers are also encouraged
to enhance student engagement through the selection of material of interest. There is enormous
variety available. Teachers may choose to add a theme of interest that runs through the entire course
such as finance (Supply and Demand, Monetary Policy and Globalisation). Teachers may choose a
range of additions such as economics and the environment/sustainability in the Economic Growth
section or income distribution in the Unemployment section. There is a wealth of opportunity to
engage students and meet their needs.
POSSIBLE CASE STUDIES
These are suggestions and ideas only.
1. The Australian Economy
Specific market study VCTA Compak magazine have, in recent years, had short price
mechanism cases studies on Nintendo Wii and the downloading of music.
Nature of markets in Australia government intervention, competition
Market failure Climate Change
Market failure taxes, welfare, the progessive tax system
Market failure case study of collusion, cartel
2. Australian Economic Issues
Employment legislation WorkChoices and the Fair Work Act
Economic Growth the environment, sustainability
Price Stability Inflation winners and losers
The Federal Budget
The Reserve Bank

3. Australia and the World Economy

Study of a TNC/MNC (Toyota, WalMart, Royal Dutch Shell, Nike, McDonalds)
Trade or investment directions and /or composition
Trade Agreements (Who benefits) or Changing Protection levels
Inequality
The environment (Globalisation good or bad for the environment?)
Development (Who has benefitted most/least from globalisation?)
Country Case Study
Industry study
Event study (eg Live 8)

COURSE CONTENT GUIDE

All content is core content (mandatory).
Students will study the following three topics:
1. The Australian Economy
2. Australian Economic Issues
3. Australia and the World Economy

Next to sections of the course listed below are references from two text books to indicate the depth
and breadth of the study required.
The Two texts are:
The Market Economy Tim Dixon and John OMahony 2010 edition Leading Edge Education
ISBN 978 1 4425 2464 4
Australia in the Global Economy Tim Dixon and John OMahony 2010 edition Leading Edge Education
ISBN 978 1 4425 2466 8

1. THE AUSTRALIAN ECONOMY

The economic problem

Needs and wants

THE MARKET ECONOMY Section 1.1
The economic problem definition and characteristics
THE MARKET ECONOMY Section 1.1
Resources (labour, capital, natural and enterprise)
THE MARKET ECONOMY Section 2.1
Four economic questions what to produce, how much to produce, how to produce and how to
distribute the produce
THE MARKET ECONOMY Section 1.1

Opportunity Cost and Production Possibilities including scarcity, defining and calculating opportunity
cost and production possibility curves.
THE MARKET ECONOMY Section 1.2 and 1.3

Australia a mixed market economy

Pure market and planned economies brief overview/contrast

THE MARKET ECONOMY Section 3.1
The key features of a mixed market economy
THE MARKET ECONOMY Section 3.1
Government intervention. How and why does the government intervene in the economy? This
includes market failure in terms of production, income distribution, market power, market instability
and externalities.
THE MARKET ECONOMY Section 3.2 and Chapter 15 and 16

Supply and Demand

Consumers and business in the market

THE MARKET ECONOMY Section 4.3 and 5.2
Demand

- determinants

Supply

- determinants

Equilibrium - determining equilibrium, shortages, surpluses and changes in equilibrium

Government intervention in the market subsidies, taxes (sales), minimum and maximum prices.
Price Elasticity of demand definition, significance to business and governement, calculation using
revenue method.
THE MARKET ECONOMY Chapters 6, 7 (excluding 7.4 and 7.5) and 8.

The circular flow

Five sectors, flows, leakages and injections. The concept of equilibrium, increasing and decreasing
the circular flow.
THE MARKET ECONOMY Chapter 2

The Business Cycle, Aggregate Demand and Aggregate Supply

Brief description and illustration of the Business Cycle.

The benefits and problems caused by upswings and downswings, including recesions.
Define Aggregate Demand and Aggregate Supply.
The significance of Aggregate Demand
Components of aggregate demand and factors that influence these components (AD = C + I + G +
(X-M))
The multiplier, marginal propensity to consume and marginal propensity to save. The multiplier (k) = 1
/ (1-MPC).
THE MARKET ECONOMY Section 2.3
AUSTRALIA IN THE GLOBAL ECONOMY Section 7.2 and 7.3
2. AUSTRALIAN ECONOMIC ISSUES

Issue - Economic Growth

Growth

Define economic growth, sustainable economic growth and GDP.

Simple calculation of the growth rate.
AUSTRALIA IN THE GLOBAL ECONOMY Section 7.1

Consequences of growth

Outline the benefits of growth in terms of standard of living, innovation and invention. Differentiate
between material and non-material standards of living (brief coverage only).
Outline the costs of growth in terms of unemployment, inflation, external stabiltiy and the
environment.
AUSTRALIA IN THE GLOBAL ECONOMY Key Section 7.4 and 7.5 Supplementary 12.2, 12.3,12.4

Issue Inflation

Inflation

Define inflation, differentiate types of inflation (demand-pull and cost-push).

Measuring inflation. The Consumer Price Index and simple calculation of inflation.
AUSTRALIA IN THE GLOBAL ECONOMY Section 9.2

Consequences of inflation

The economic impact of inflation on interest rates, investment, external stability income distribution
and material standard of living.
AUSTRALIA IN THE GLOBAL ECONOMY Section 9.5
Issue Unemployment

Employment and Unemployment

Define unemployed, employed, population, labour force and participation rate.

Differentiate types of unemployment (structural and cyclical).
Measuring unemployment. The ABS survey and simple calculation of unemployment.
AUSTRALIA IN THE GLOBAL ECONOMY Section 8.2 and 8.4
Consequences of Unemployment
The economic impact of unemployment on output, the Budget, income distribution and labour skills.

The impact of unemployment on poverty, physical health, mental health, crime and personal
relationships.
AUSTRALIA IN THE GLOBAL ECONOMY Section 8.7
Government Objectives and Policy
The Objectives of Economic Policy
The objectives of economic management
AUSTRALIA IN THE GLOBAL ECONOMY 13.1 13.3 inclusive
Fiscal Policy/Budgetary Policy
Define Fiscal Policy.
The budget including revenue and expenditure.
Automatic stabilisers (welfare payments and progressive taxes)
The impact of different Budget outcomes on Aggregate Demand
AUSTRALIA IN THE GLOBAL ECONOMY 14.1, 14.2, 14.3

Monetary Policy

Define Monetary Policy.

The role of the RBA including targetting and independence. Knowledge of market operations not
required.
The transmission mechanism. The impact of interest rate changes on Aggregate Demand.
AUSTRALIA IN THE GLOBAL ECONOMY 15.1, 15.2, 15.3 first two dot points only knowledge of DMO not
required) 15.4
Overview of Monetary, Fiscal and Micro economic reform Policy
The role of monetary and fiscal policy in managing inflation (demand-pull), unemployment (structural
and cyclical) and economic growth.
Basic coverage of policy conflicts.
Basic overview of micro economic reform aims only.
The policy mix
AUSTRALIA IN THE GLOBAL ECONOMY Section 8.6, 9.4, 13.4, 13.5, 14.6, 15.4, 15.5 and 16.1
3. AUSTRALIA AND THE WORLD ECONOMY
Australian trade
Trade
Why does Australia trade with other economies? Refer to employment, income, choice,
economies of scale, access to resources, specialisation and resource allocation
Comparative Advantage. (Theory only, no calculations)
AUSTRALIA IN THE GLOBAL ECONOMY Section 2.1

 Trade Protection and reform

Reasons for trade protection
Trade protection using tariffs, subsidies and quotas. (no diagrams examined)
The implications of reducing protection for Australia
AUSTRALIA IN THE GLOBAL ECONOMY Section 2.2, 2.3, 6.1, 6.2, 6.3 and 6.4

Exchange rates

Define floating exchange rate.

Define appreciation and depreciation of a floating exchange rate.
What are the causes of an appreciation/depreciation of a floating exchange rate? Refer to supply
and demand.
What are the effects of an appreciation/depreciation of a floating exchange rate?
What is the TWI (simple coverage only)
AUSTRALIA IN THE GLOBAL ECONOMY section 5.1, 5.2 and 5.5

Australias Balance of Payments

The balance of payments

Brief overview of the two accounts. Focus on trade balance and income accounts. No
calculations required. Very basic coverage of capital and financial account only (as per text
glossary)
AUSTRALIA IN THE GLOBAL ECONOMY section 4.4

The Current Account Deficit

What is a current account defict and foreign debt?

What are the consequences of a high current account deficit and foreign debt? Include impact of
debt servicing, Also include alternate view that debt is not a problem.
AUSTRALIA IN THE GLOBAL ECONOMY section 4.4, 4.5 and 4.8

Globalisation

Globalisation and Development

Define and differentiate globalisation and development

Differences in economic development including HDI and standard of living.
AUSTRALIA IN THE GLOBAL ECONOMY 3.1, 3.2 and 3.3

The impact of globalisation

Brief overview of the impact of globalisation on economic growth, economic development,
international trade, inequality and the environment.
AUSTRALIA IN THE GLOBAL ECONOMY 3.5, 3.6

RESOURCES
Below is a list of some of the many resources available to teachers.
Text Books
Dixon, T.& Omahony, J. The Market Economy Year 11 Preliminary Economics 2010 edition, Australia,
Leading Edge Education
Dixon, T.& Omahony, J. Australia in the Global Economy Year 12 HSC Economics 2010 edition, Australia,
Leading Edge Education
McConnell, J. & Smith, W. Economic Activity Book 1 3rd ed Australia, Macmillan
McConnell, J. & Nailon, K. Economic Activity Book 2 7th ed Australia, Macmillan
Morris R. ECONOMICS DOWN UNDER BOOK 1 - VCE ECONOMICS UNITS 1&2 6ED Australia
Jacarana
Morris R. ECONOMICS DOWNUNDER 5ED VCE ECONOMICS UNITS 3&4 Australia Jacarana
Parry, G & Kemp, S. PATHWAYS IN ECONOMICS.Australia Tactic Publications.
Wallace, D. Macquarie Revision Guides HSC Economics Australia Macmillan

WorkBooks
The Market ECONOMY Year 11 Preliminary Economics Workbook Third Edition Australia Leading Edge
Dixon, T & Astron Douglas, A & O'Mahony, J & Truswell, E AUSTRALIA IN THE GLOBAL ECONOMY
Year 12 HSC ECONOMICS COURSE WORKBOOK Fourth EDITION Australia Leading Edge
Journals
EcoDate
COMPAK (published by VCTA)
Current Economics
Websites
The Age. www.theage.com.au/
Austrade: www.austrade.gov.au
Aust. Bureau of Statistics: www.abs.gov.au
The Australian Financial Review www.afr.com/
Australian Competition and Consumer Commission www.accc.gov.au/
Australian Government, The Treasury www.treasury.gov.au/
Current exchange rate: www.xe.com

Current Federal Budget. www.budget.gov.au/

Department of Foreign Affairs & Trade: www.dfat.gov.au/trade
Economist.com www.economist.com/
Environment Australia: www.environment.gov.au
Make Poverty History Campaign: www.makepovertyhistory.org
MrWood Commerce Education www.MrWood.com.au
Reserve Bank of Australia: www.rba.gov.au
United Nations Environment Network: www.unep.net
Victorian Commercial Teachers Association www.vcta.asn.au/
World Bank: www.worldbank.org
World Trade Organisation: www.wto.org

FORMULAS
1.

Unemployment rate (%)

2.

Labour Force Participation Rate (%)

3.

Economic Growth (%)

4.

Inflation Rate (%)

5.

Multiplier

6.

Increase in Income