Economics ATAR Syllabus Notes

Year 12 - Economics Unit 3 

Australia and the Global Economy

 

Global Interdependence

WACE Syllabus

  • linkages between economies, including trade, investment, tourism and immigration

  • the patterns and trends in global trade

  • the concept, and determinants, of international competitiveness

  • the concept, and extent, of globalisation

  • the factors facilitating globalisation

  • economic effects of globalisation

 

Free Trade and Protection

WACE Syllabus

  • the significance of trade for the Australian economy

  • sources of comparative advantage

  • demonstrate the gains from specialisation and trade i.e. the theories of absolute and comparative advantage, using the demand and supply model, the production possibility frontier model and/or the concept of opportunity cost

  • identify different forms of protection

  • demonstrate the operation of tariffs and subsidies as forms of protection and their effects on trade and market efficiency

  • arguments for and against trade liberalisation

  • the influence of trade agreements, organisations and blocs on world trade

 

Pattern of Trade

WACE Syllabus

  • Australia’s trade intensity

  • patterns and trends in the composition and direction of Australia’s trade 

 

Balance of Payments

WACE Syllabus

  • the structure of Australia's balance of payments and the concept of the current account balance

  • recent (the last ten years) trends in Australia’s current account

  • structural and cyclical reasons for Australia’s current account deficit

  • differing views as to the significance of Australia’s current account deficit

 

Terms of Trade

WACE Syllabus

  • the concepts of the terms of trade and the terms of trade index

  • factors that affect the terms of trade

  • recent (the last ten years) trends in Australia’s terms of trade

  • the significance of changes in Australia’s terms of trade

 

Exchange Rate

WACE Syllabus

  • the concept of an exchange rate

  • demonstrate the determination of, and movements in, the exchange rate (i.e. an appreciation and a depreciation of the exchange rate) under a freely floating system using the demand and supply model

  • the trade-weighted index

  • demonstrate the impact of changes in the factors that affect the exchange rate using the demand and supply model

  • the relationship between the balance of payments and the exchange rate

  • effects of movements in the exchange rate on various sectors of the economy

  • recent (the last ten years) trends in Australia’s exchange rate

 

Foreign Investment

WACE Syllabus

  • the concept of foreign investment in terms of foreign assets and foreign liabilities

  • the concept of foreign liabilities i.e. foreign debt and equity

  • the relationship between the current account outcome and foreign liabilities

  • the extent of, and recent (the last ten years) trends in, Australia’s foreign direct investment and foreign debt

  • benefits and costs of foreign direct investment and foreign debt to Australia  

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