Economics Q&A by dot point

Explain the circular flow of income model, including the five sectors, the flows of income and expenditure, and the role of injections and leakages in determining the level of economic activity

Explain the operation of the market mechanism including the laws of demand and supply, equilibrium price and quantity, movements along and shifts of curves, and price elasticity of demand and supply

Explain how government price controls (price ceilings and price floors) affect the operation of a market, and analyse the effects on consumer surplus, producer surplus and total welfare

Explain the basic economic problem of scarcity and the resulting need to make choices, including the concepts of opportunity cost and the production possibility frontier

Explain how the price mechanism allocates resources in a market economy through the signalling, incentive and rationing functions of prices, and how this answers the what, how and for whom questions

Explain the different market structures (perfect competition, monopolistic competition, oligopoly, monopoly) and the role of government in regulating market conduct, including the ACCC and the Competition and Consumer Act 2010

Explain the factors that influence aggregate demand and aggregate supply in the Australian economy, and how each affects real GDP, employment and inflation

Explain the measurement of macroeconomic activity including real GDP, the Consumer Price Index and the unemployment rate, and the limitations of each measure

Explain the forms of market failure (public goods, externalities, asymmetric information, market power) and analyse the rationale for and forms of government intervention to correct market failure

Explain the expenditure multiplier process, including the marginal propensities to consume and save, the leakages that determine the size of the multiplier, and the effect of a change in injections on national income

Explain the determination of the Australian exchange rate under a floating regime, draw the foreign exchange market diagram, and analyse the structure of the balance of payments including the current account and capital and financial account

Explain the impact of globalisation on Australia, the role of major international organisations (WTO, IMF, World Bank), and evaluate the impact of Australia's free trade agreements

Explain the theory of comparative advantage and the gains from trade, analyse the rationale for and forms of protection (tariffs, subsidies, quotas, local content rules), and evaluate the impact of free trade agreements on the Australian economy

Explain the terms of trade, how they are measured, the factors that cause them to change, and analyse the effects of a change in the terms of trade on the Australian economy

Explain the role of aggregate supply policies in achieving the macroeconomic objectives, including training and education, infrastructure, innovation and R&D, immigration, competition and deregulation, and tax reform

Explain the objective of strong and sustainable economic growth, the difference between actual and potential growth, the main sources of economic growth, and analyse the benefits and costs of growth

Explain the role of fiscal policy and monetary policy in achieving the macroeconomic objectives, including the structure of the Commonwealth Budget, the cash rate as the RBA instrument, and the transmission mechanism

Explain the distribution of income and wealth in Australia, the role of the tax and transfer system in redistribution, and analyse the impact of income distribution on aggregate demand, social cohesion and intergenerational equity

Explain the major macroeconomic objectives (strong and sustainable economic growth, full employment, low and stable inflation, equity, environmental sustainability), how each is measured, and the trade-offs between them