§-Module

Unit 2: Modified markets

4 dot points across 2 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

Topic 2: Macroeconomic indicators and government policy

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

A focused QCE Economics Unit 2 answer on the determinants of AD and AS. Identifies the eight main AD factors and the six main AS factors, traces cause-and-effect chains to real GDP, employment and inflation, and applies the framework to recent Australian conditions.

7 min answer →

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

A focused QCE Economics Unit 2 answer on macroeconomic indicators. Defines real GDP, the CPI and the unemployment rate, identifies the ABS data sources, explains the limitations of each measure, and applies them to current Australian conditions.

7 min answer →

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

A focused QCE Economics Unit 2 answer on the expenditure multiplier. Defines the marginal propensities to consume and save, derives the multiplier from the leakages (saving, taxation, imports), works through a numerical example, and explains why a change in injections changes national income by a larger amount.

8 min answer →

Topic 1: Market failure and government intervention

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

A focused QCE Economics Unit 2 answer on market failure. Identifies the four types (public goods, externalities, asymmetric information, market power), draws the negative externality diagram, and analyses five intervention tools (taxes, subsidies, regulation, public provision, direct provision) with current Australian examples.

8 min answer →