§-Economics syllabus
WA · SCSA← Economics
Economics syllabus, dot point by dot point
Every dot point in the WA 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 and the Global Economy
Module overview →What does Australia trade, with whom, and what role do free trade agreements play?
Describe the composition and direction of Australia's trade, explain the role of bilateral, regional and multilateral trade agreements, and analyse Australia's reliance on key trading partners
How is the value of the Australian dollar determined and why does it matter?
Explain how a floating exchange rate is determined by demand and supply, the causes of appreciation and depreciation, and the effects of exchange rate movements on the economy
Why does Australia rely on foreign investment and what are its benefits and costs?
Distinguish foreign direct investment from portfolio investment, explain why Australia is a net capital importer, and analyse the benefits and costs of foreign investment for the Australian economy
Should governments protect domestic industries or pursue free trade?
Analyse methods of protection (tariffs, subsidies, quotas) and the arguments for and against free trade and protection in the Australian context
How does specialisation according to comparative advantage create gains from trade for both countries?
Use opportunity cost ratios and a production possibility analysis to demonstrate how two countries both gain from specialising and trading, and explain the limits and distribution of those gains
How does globalisation shape Australia's international competitiveness?
Explain globalisation, the terms of trade and international competitiveness, and analyse Australia's trade relationships and the role of productivity
Why do countries trade and what determines the pattern of trade?
Explain the basis for trade using absolute and comparative advantage, opportunity cost and the gains from specialisation and trade
What does the terms of trade measure and why does it matter so much for Australia?
Define and calculate the terms of trade, explain the causes of movements in Australia's terms of trade, and analyse the effects of a rising or falling terms of trade on national income and the balance of payments
How does Australia record its transactions with the rest of the world?
Explain the structure of the balance of payments, the current and capital and financial accounts, and the causes and consequences of current account deficits and surpluses
Why does Australia run persistent current account deficits and does it matter?
Explain the causes of Australia's current account deficit using the savings-investment gap, distinguish net foreign debt from net foreign equity, and evaluate whether a current account deficit is a problem
Unit 4: Macroeconomic Theory and Economic Policy
Module overview →How do aggregate demand and aggregate supply determine output and prices?
Explain the components of aggregate demand and aggregate supply, the AD/AS model, the business cycle and the multiplier
How do leakages and injections determine the level of national income?
Explain the five-sector circular flow of income, identify the leakages and injections, and use the equilibrium condition to explain how the level of economic activity is determined
How is income distributed in Australia and how is inequality measured?
Distinguish income from wealth, explain how the Lorenz curve and Gini coefficient measure inequality, and evaluate the causes, effects and policy responses to income inequality in Australia
What drives economic growth and what are its benefits and costs?
Define and measure economic growth using real GDP, explain its sources from aggregate demand and aggregate supply, and evaluate the benefits and costs of growth including sustainability
How does the federal government use the budget to manage the economy?
Explain fiscal policy, the federal budget, automatic stabilisers and discretionary policy, budget outcomes and government debt, and the strengths and weaknesses of fiscal policy
What causes inflation and why does the RBA target it?
Define and measure inflation using the CPI, distinguish demand-pull from cost-push inflation, and explain the effects of inflation and the rationale for the RBA's inflation target
What determines wages and why does labour productivity growth matter?
Explain how wages are determined in the labour market, define and measure labour productivity, and analyse the factors and policies that influence labour productivity growth
What are the government's macroeconomic objectives and how do they conflict?
Explain the macroeconomic objectives of low inflation, full employment and economic growth, how each is measured, and the conflicts between them
How does microeconomic reform lift productivity and aggregate supply?
Explain microeconomic reform and supply-side policy, how it raises productivity and aggregate supply, and evaluate examples in the Australian economy
How does the RBA use monetary policy to manage the economy?
Explain monetary policy, the role of the RBA, the cash rate as the policy instrument, the transmission mechanism, the policy stance, and the strengths and weaknesses of monetary policy
What causes the economy to move through booms and recessions?
Describe the phases of the business cycle, explain the causes of cyclical fluctuations including cumulative processes and shocks, and explain how turning points and stabilisers shape the cycle
Why does an initial change in spending lead to a larger change in national income?
Explain the multiplier process, calculate the multiplier from the marginal propensities, and use it to analyse the effect of a change in injections on the level of economic activity
How is unemployment measured and what are its different types and costs?
Define and measure unemployment and the participation rate, distinguish the types of unemployment, explain the concept of full employment and the NAIRU, and analyse the costs of unemployment