Economics ATAR Syllabus Notes

Year 12 - Economics Unit 4 

Economic Policies and Management

The Business Cycle

WACE Syllabus

  • the concept of the business cycle

  • characteristics of the phases, and causes, of the business cycle

  • the relationship between the business cycle and economic indicators

 
 

Aggregate Expenditure Model

WACE Syllabus

  • the concept and factors of components of aggregate expenditure (AE)

    • consumption

    • investment

    • government spending

    • net exports

  • the relationship between the consumption function, the marginal propensity to consume and the marginal propensity to save

  • the concept of macroeconomic equilibrium

  • demonstrate the impact of changes in aggregate expenditure on the equilibrium level of income/output using the AE model

  • the impact of changes in each of the components of aggregate expenditure i.e. the multiplier process using the AE model

 

Aggregate Demand and Supply Model

WACE Syllabus

  • the aggregate demand (AD) curve and factors that can cause movements along and shifts of the AD curve

  • the aggregate supply (AS) curve and factors that can cause movements along and shifts of the AS curve

  • demonstrate macroeconomic equilibrium using the AD/AS model

  • demonstrate the impact of changes in aggregate demand and aggregate supply on the equilibrium level of income/output using the AD/AS model

  • the use of the AD/AS model to explain the business cycle

 

Economic Policy Objectives

WACE Syllabus

  • the economic objectives of the Australian Government

    • sustainable economic growth

    • low inflation (price stability)

    • low unemployment (full employment)

    • a more equitable distribution of income

    • the efficient allocation of resources

  • the extent to which the economic objectives of the Australian Government may conflict and complement each other

  • the economic policy objectives of the Reserve Bank of Australia (RBA)

  • the time lags which occur in the use of economic policies i.e. recognition, decision (implementation) and effect (impact) lags

 

Fiscal Policy

WACE Syllabus

  • the concept of fiscal policy

  • the components of government revenue and expenditure in the budget

  • the different budget outcomes i.e. balanced, surplus and deficit budgets

  • reasons that account for differences between planned and actual budget outcomes

  • methods of financing a budget deficit and the uses of a budget surplus

  • the distinction between automatic fiscal stabilisers and discretionary fiscal policy

  • the distinction between budget outcomes associated with automatic fiscal stabilisers and budget outcomes associated with discretionary fiscal policy

  • the concepts of expansionary, contractionary and neutral fiscal policy stances

  • the impact of different fiscal policy stances on the level of economic activity

  • strengths and weaknesses of fiscal policy

  • contemporary (the last three years) fiscal policy stances in Australia

 

Monetary Policy

WACE Syllabus

  • the concepts of monetary policy and the cash rate

  • circumstances under which the RBA may change the cash rate

  • how monetary policy affects the level of economic activity i.e. the transmission mechanism

  • the concepts of expansionary, contractionary and neutral monetary policy stances

  • the impact of different monetary policy stances on the level of economic activity

  • strengths and weaknesses of monetary policy

  • contemporary (the last three years) monetary policy stances in Australia

 

Structural Change

WACE Syllabus

  • the concept, and main causes, of structural change

  • the effects of structural change

  • the relationship between economic growth and structural change

 

Productivity

WACE Syllabus

  • the concept of productivity

  • the distinction between labour productivity and multifactor productivity

  • the relationship between productivity and economic growth

  • recent (the last ten years) government policies that promote productivity and economic growth, such as labour market reform, taxation reform, trade liberalisation, deregulation and competition policy, investment in infrastructure, education and training, research and innovation

  • the impact of productivity on the achievement of macroeconomic objectives

Email: christian.bien@atarsurvivalguide.com

ABN: 87 574 760 103

  • Facebook - Black Circle
  • YouTube - Black Circle

"ATAR" is a registered trademark of Monash University as a Trustee For The Victorian Tertiary Admission Centre .The School Curriculum and Standards Authority (SCSA) have no involvement in or responsibility for any material appearing on this site. Nor does SCSA endorse or make any warranties regarding the study resources, current and past WACE exams available on this site or sold by Christian Bien. 

Copyright © 2020 Christian Bien at the ATAR Survival Guide