§-Module

Topic 3: Economic Issues

7 dot points across 1 inquiry question, in syllabus order. Each dot point has a focused answer, with exam-style questions and worked answers where available.

What are the major economic issues for the Australian economy and how are they measured?

Investigate the objectives of economic management (economic growth, low unemployment, price stability, external stability, distributional equity, environmental sustainability) and examine the conflicts and trade-offs that arise between them, such as growth versus inflation and growth versus the environment

An HSC Economics Topic 3 answer covering the six objectives of economic management (growth, unemployment, inflation, external stability, equity, sustainability), how each is measured, and the trade-offs between them, especially growth versus inflation and growth versus the environment.

13 min read →

Examine the economic issue of economic growth including the measurement of economic growth, sources of economic growth, the role of aggregate demand and aggregate supply, and the effects of economic growth in Australia

Economic growth. Defines real GDP and trend growth, explains sources of growth, draws the AD/AS framework, identifies the four phases of the business cycle, and reviews Australia's growth performance with recent ABS National Accounts data.

12 min read →

Examine the issue of distribution of income and wealth in Australia including the measurement of inequality, the Lorenz curve and the Gini coefficient, dimensions and trends in inequality, and the economic and social impacts of inequality

Inequality. Distinguishes income from wealth, draws and reads the Lorenz curve, defines the Gini coefficient, identifies the sources of inequality in Australia, and analyses recent ABS Survey of Income and Housing trends.

7 min read →

Examine the issue of environmental sustainability including ecologically sustainable development, market failure, negative externalities, and the impact of climate change on the Australian economy

Environmental sustainability. Defines ecologically sustainable development, explains market failure and negative externalities with a marginal social cost diagram, and analyses the economic impact of climate change on Australia using dated data.

10 min read →

Examine the economic issue of external stability including the measurement of the current account deficit (CAD), net foreign liabilities, the terms of trade and the exchange rate, and the causes and consequences of external instability for Australia

External stability. Defines the CAD and net foreign liabilities, explains the terms of trade and the exchange rate, and analyses the causes and consequences of external instability with recent RBA and ABS data.

9 min read →

Examine the economic issue of inflation including the measurement of inflation, the difference between headline and underlying inflation, the causes of inflation, and the effects of inflation in Australia

Inflation. Defines CPI, headline vs underlying (trimmed mean) inflation, distinguishes demand-pull from cost-push and imported inflation, and analyses the 2022-2024 inflation episode with current ABS and RBA data.

8 min read →

Examine the economic issue of unemployment including the measurement of unemployment, types of unemployment, the causes of unemployment, the non-accelerating inflation rate of unemployment (NAIRU), and the consequences of unemployment

Unemployment. Defines the unemployment rate and participation rate, identifies the eight types of unemployment, explains the NAIRU, and analyses the consequences of unemployment with recent ABS Labour Force data.

8 min read →