Introduction

Unit 1

Unit 2

Unit 3

Unit 4

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Comnet Economics Classroom

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Unit 4: Economic management

The focus of this unit is the study of the management of the Australian economy, which concentrates on budgetary/fiscal, monetary and microeconomic reform policies.

Area of Study 1 : The nature, operation and evaluation of macroeconomic policies
Budgetary/fiscal policy and monetary policy are two macroeconomic policies used in Australia to manage the level of activity in the economy. Students will develop understandings about how these policies operate to achieve desired outcomes in relation to the achievement of the economic objectives of the Australian economy. Students will develop a general knowledge of the operation of these policies over the last ten years and a more detailed understanding of the operation of the policies over the last three years. Students should be equipped to make informed predictions about the operation of these policies for the short-term based on an analysis of current key economic trends. Students will apply the language, theories and tools of economics to develop a critical perspective about the role of these policies in the current government policy mix.

Outcome 1
On completion of this unit the student should be able to explain the nature and operation of government macroeconomic policy and evaluate its effectiveness in terms of achieving the Australian Government's economic objectives over the past decade.

To achieve this outcome the student will draw on knowledge and related skills outlined in area of study 1.

Key knowledge
This knowledge includes:

  • key macroeconomic policies including:
    - budgetary/fiscal policy: the level and composition of government revenues and outlays, the operation of automatic and discretionary stabilisers, methods of financing a budget deficit or using a budget surplus, and the provision of incentives to increase aggregate supply;
    - monetary policy: Reserve Bank of Australia interest rate and exchange rate policies, and the transmission mechanisms which influence the level of economic activity;
  • the ways in which macroeconomic policies operate to address economic problems;
  • the effectiveness of budgetary/fiscal policy and monetary policy in achieving the Australian Government's economic objectives;
  • the role of macroeconomic policies in the current government policy mix including the conflict and compatibility of budgetary/fiscal policies, monetary policies and microeconomic reform policy.

    Key skills
    These skills include the ability to:

  • gather relevant data and information about the nature and operation of macroeconomic policy in Australia;
  • apply economic knowledge, skills and models to Australian Government macroeconomic policy in economic management;
  • interpret economic information and data;
  • apply skills of economic analysis, including problem-solving;
  • apply economic concepts and theories and evaluate economic arguments and evidence to make informed judgments;
  • construct graphs and tables to represent economic data