Economics is interested in the way humans behave and the decisions made to meet the needs and wants of society. Students explore their role in the economy, how they interact with businesses and the way economic models and theories have been developed to explain the causes and effects of human action. Students investigate contemporary examples and case studies to enhance their understanding of the introductory economic concepts. Through close examination of key markets they gain insight into the factors that may affect the way resources are allocated in an economy and how market power can affect living standards.
Students focus on the possible trade-off between the pursuit of growth in incomes and production and the goal of environmental sustainability and long-term economic prosperity. They investigate the importance of economic growth in terms of raising living standards and evaluate how achievement of this goal might result in degradation of the environment and the loss of key resources. Students explore how the benefits of economic growth are shared in an economy and begin to appreciate that efforts to increase economic efficiency might lead to a more inequitable distribution of income.
In this unit students investigate the role of the market in allocating resources and examine the factors that are likely to affect the price and quantity traded for a range of goods and services. They develop an understanding of the key measures of efficiency and how market systems can result in efficient outcomes They investigate the factors that influence the level of aggregate demand and aggregate supply in the economy and use models and theories to explain how changes in these variables might influence the achievement of the Australian Government’s domestic macroeconomic goals and affect living standards. Students investigate the importance of international economic relationships in terms of their influence on Australia’s living standards.
The ability of the Australian Government to achieve its domestic macroeconomic goals has a significant effect on living standards in Australia. The Australian Government can utilise a wide range of policy instruments to influence these goals and to positively affect living standards. Area of Study 1 focuses on the role of aggregate demand policies in stabilising the business cycle to achieve the Australian Government’s domestic macroeconomic goals. In Area of Study 2 students consider how the Australian Government utilises aggregate supply policies to manage the Australian economy.