§-Economics syllabus
VIC · VCAA← Economics
Economics syllabus, dot point by dot point
Every dot point in the VIC Economics syllabus, with a focused answer for each. Click any dot point for a worked explainer, past exam questions and links to related points.
Unit 3: Australia's economic prosperity
Module overview →What factors influence Australia's macroeconomic performance?
The factors that influence aggregate demand and aggregate supply, and how each affects the achievement of the domestic macroeconomic goals, including consumer and business confidence, interest rates, disposable income, the exchange rate, government policy, productivity, costs of production and overseas economic conditions
Why does the level of economic activity fluctuate over time?
The meaning and measurement of the business cycle, including the phases of expansion, peak, contraction and trough, the difference between an expansion and a recession, the causes of fluctuations in economic activity, and the consequences of booms and recessions for the domestic macroeconomic goals
How does income, expenditure and output flow through the economy?
The circular flow model of income, including the sectors and the flows between them, leakages and injections, the meaning of equilibrium in the model, and how changes in leakages and injections lead to changes in the level of economic activity
What are the domestic macroeconomic goals and what determines their achievement?
The domestic macroeconomic goals of strong and sustainable economic growth, full employment, and low and stable inflation, including how each is measured, how each has been performing in recent years, and the relationships and trade-offs between them
How does the market system allocate resources and what role is there for government intervention?
The concept of price elasticity of demand and price elasticity of supply, the factors that affect each, and the relevance of elasticity to the operation of markets and to the effect of government intervention
How is income distributed and why does equity in the distribution of income matter?
The meaning of equity in the distribution of income, the difference between equity and equality, how the distribution of income is measured (the Lorenz curve and the Gini coefficient), the causes of income inequality, and the relationship between equity and efficiency
How does the market system allocate resources and what role is there for government intervention?
The forms of market failure (public goods, externalities, asymmetric information, market power) and the rationale for and forms of government intervention to correct market failure, including indirect taxes, subsidies, regulation, public provision and direct provision
What are living standards and what factors affect their achievement?
The meaning of material and non-material living standards, the relationship between economic activity and living standards, the factors that affect living standards, and the limitations of using GDP as a measure of living standards
How does the market system allocate resources and what role is there for government intervention?
The market mechanism and the role of demand and supply in determining relative prices and the allocation of resources, including the conditions of perfect competition, the law of demand, the law of supply, equilibrium price and quantity, and movements along versus shifts of the curves
Unit 4: Managing the economy
Module overview →How are aggregate supply policies used to achieve the domestic macroeconomic goals?
The role of aggregate supply policies in achieving the domestic macroeconomic goals, including the rationale for supply-side policy, the major categories (training and education, infrastructure investment, innovation and R&D, immigration, competition and deregulation, tax reform), and the strengths and weaknesses
How are aggregate demand policies used to achieve the domestic macroeconomic goals?
The role of budgetary (fiscal) policy in achieving the domestic macroeconomic goals, including the structure of the Commonwealth Budget, automatic stabilisers and discretionary changes, the budget outcome and the public debt, and the strengths and weaknesses of budgetary policy
How is the exchange rate determined and how does it affect the economy?
The determination of the exchange rate under a floating system, the factors that cause appreciation and depreciation, the effects of exchange rate movements on the domestic macroeconomic goals and on external stability, and the meaning and measurement of external stability
How are aggregate supply policies used to achieve the domestic macroeconomic goals?
The role of labour market reforms and immigration in influencing aggregate supply and the achievement of the domestic macroeconomic goals, including wages policy, enterprise bargaining, the Fair Work Commission, the National Employment Standards, and the size and composition of the migration program
How are aggregate demand policies used to achieve the domestic macroeconomic goals?
The role of monetary policy in achieving the domestic macroeconomic goals, including the cash rate as the policy instrument, the transmission mechanism, the stance of monetary policy, and the strengths and weaknesses of monetary policy