T A S M A N I A N Economics C E R T I F I C A T E ECN315111 O F E D U C A T I O N COURSE GUIDE This Guide must be read in conjunction with the accredited Course Document. It contains advice to assist teachers delivering the course. Tasmanian Qualifications Authority Version 1 Publication: 6 March 2016 2 Economics ADVICE FOR PROVIDERS GENERAL ADVICE The course content is all core (mandatory). The course is designed to have the teaching of core content supported by the use of current examples, issues and case studies. The course flows logically and may be taught in the sequence presented in the course document but is open to significant flexibility and teachers can choose any appropriate sequence. The concepts introduced in the first part of the course are intended to underpin the learning in Parts 2 and 3. For example the theory of the price mechanism in Part 1 is applied in several other sections of the course such as in determining floating exchange rates. Teachers are encouraged to use current issues throughout the course. Teachers are also encouraged to enhance student engagement through the selection of material of interest. There is enormous variety available. Teachers may choose to add a theme of interest that runs through the entire course such as finance (Supply and Demand, Monetary Policy and Globalisation). Teachers may choose a range of additions such as economics and the environment/sustainability in the Economic Growth section or income distribution in the Unemployment section. There is a wealth of opportunity to engage students and meet their needs. POSSIBLE CASE STUDIES These are suggestions and ideas only. 1. The Australian Economy Specific market study – VCTA Compak magazine have, in recent years, had short price mechanism cases studies on Nintendo Wii and the downloading of music. Nature of markets in Australia – government intervention, competition Market failure – Climate Change Market failure – taxes, welfare, the progessive tax system Market failure – case study of collusion, cartel 2. Australian Economic Issues Employment – legislation WorkChoices and the Fair Work Act Economic Growth – the environment, sustainability Price Stability – Inflation winners and losers The Federal Budget The Reserve Bank 3. Australia and the World Economy Study of a TNC/MNC (Toyota, WalMart, Royal Dutch Shell, Nike, McDonalds) Trade or investment directions and /or composition Trade Agreements (Who benefits) or Changing Protection levels Inequality The environment (Globalisation good or bad for the environment?) Development (Who has benefitted most/least from globalisation?) Country Case Study Industry study Event study (eg Live 8) Tasmanian Qualifications Authority Version 1 Publication: 6 March 2016 Economics 3 COURSE CONTENT GUIDE All content is core content (mandatory). Students will study the following three topics: 1. The Australian Economy 2. Australian Economic Issues 3. Australia and the World Economy Next to sections of the course listed below are references from two text book s to indicate the depth and breadth of the study required. The Two texts are: The Market Economy Tim Dixon and John O’Mahony 2010 edition Leading Edge Education ISBN 978 1 4425 2464 4 Australia in the Global Economy Tim Dixon and John O’Mahony 2010 edition Leading Edge Education ISBN 978 1 4425 2466 8 1. THE AUSTRALIAN ECONOMY The economic problem Needs and wants THE MARKET ECONOMY Section 1.1 The economic problem – definition and characteristics THE MARKET ECONOMY Section 1.1 Resources (labour, capital, natural and enterprise) THE MARKET ECONOMY Section 2.1 Four economic questions – what to produce, how much to produce, how to produce and how to distribute the produce THE MARKET ECONOMY Section 1.1 Opportunity Cost and Production Possibilities – including scarcity, defining and calculating opportunity cost and production possibility curves. THE MARKET ECONOMY Section 1.2 and 1.3 Tasmanian Qualifications Authority Version 2 Publication: 6 March 2016 4 Economics Australia – a mixed market economy Pure market and planned economies – brief overview/contrast THE MARKET ECONOMY Section 3.1 The key features of a mixed market economy THE MARKET ECONOMY Section 3.1 Government intervention. How and why does the government intervene in the economy? This includes market failure in terms of production, income distribution, market power, market instability and externalities. THE MARKET ECONOMY Section 3.2 and Chapter 15 and 16 Supply and Demand Consumers and business in the market THE MARKET ECONOMY Section 4.3 and 5.2 Demand - determinants Supply - determinants Market Equilibrium - determining equilibrium, shortages, surpluses and changes in equilibrium Government intervention in the market – subsidies, taxes (sales), minimum and maximum prices. Price Elasticity of demand – definition, significance to business and governement, calculation using revenue method. THE MARKET ECONOMY Chapters 6, 7 (excluding 7.4 and 7.5) and 8. The circular flow Five sectors, flows, leakages and injections. The concept of equilibrium, increasing and decreasing the circular flow. THE MARKET ECONOMY Chapter 2 The Business Cycle, Aggregate Demand and Aggregate Supply Brief description and illustration of the Business Cycle. The benefits and problems caused by upswings and downswings, including recesions. Define Aggregate Demand and Aggregate Supply. The significance of Aggregate Demand Components of aggregate demand and factors that influence these components (AD = C + I + G + (X-M)) The multiplier, marginal propensity to consume and marginal propensity to save. The multiplier (k) = 1 / (1-MPC). THE MARKET ECONOMY Section 2.3 AUSTRALIA IN THE GLOBAL ECONOMY Section 7.2 and 7.3 Tasmanian Qualifications Authority Version 1 Publication: 6 March 2016 Economics 5 2. AUSTRALIAN ECONOMIC ISSUES Issue - Economic Growth Growth Define economic growth, sustainable economic growth and GDP. Simple calculation of the growth rate. AUSTRALIA IN THE GLOBAL ECONOMY Section 7.1 Consequences of growth Outline the benefits of growth in terms of standard of living, innovation and invention. Differentiate between material and non-material standards of living (brief coverage only). Outline the costs of growth in terms of unemployment, inflation, external stabiltiy and the environment. AUSTRALIA IN THE GLOBAL ECONOMY Key Section 7.4 and 7.5 Supplementary 12.2, 12.3,12.4 Issue – Inflation Inflation Define inflation, differentiate types of inflation (demand-pull and cost-push). Measuring inflation. The Consumer Price Index and simple calculation of inflation. AUSTRALIA IN THE GLOBAL ECONOMY Section 9.2 Consequences of inflation The economic impact of inflation on interest rates, investment, external stability income distribution and material standard of living. AUSTRALIA IN THE GLOBAL ECONOMY Section 9.5 Issue – Unemployment Employment and Unemployment Define unemployed, employed, population, labour force and participation rate. Differentiate types of unemployment (structural and cyclical). Measuring unemployment. The ABS survey and simple calculation of unemployment. AUSTRALIA IN THE GLOBAL ECONOMY Section 8.2 and 8.4 Tasmanian Qualifications Authority Version 2 Publication: 6 March 2016 6 Economics Consequences of Unemployment The economic impact of unemployment on output, the Budget, income distribution and labour skills. The social and economic impact of unemployment on poverty, physical health, mental health, crime and personal relationships. AUSTRALIA IN THE GLOBAL ECONOMY Section 8.7 Government Objectives and Policy The Objectives of Economic Policy The objectives of economic management AUSTRALIA IN THE GLOBAL ECONOMY 13.1 – 13.3 inclusive Fiscal Policy/Budgetary Policy Define Fiscal Policy. The budget including revenue and expenditure (includes stance and income). Automatic stabilisers (welfare payments and progressive taxes) The impact of different Budget outcomes on Aggregate Demand Evaluation of Fiscal policy – key strengths and weaknesses AUSTRALIA IN THE GLOBAL ECONOMY 14.1, 14.2, 14.3 Monetary Policy Define Monetary Policy. The role of the RBA including targetting and independence. Knowledge of market operations not required. The transmission mechanism. The impact of interest rate changes on Aggregate Demand. Evaluation of Monetary policy – key strengths and weaknesses – time lags, effectiveness with targeting inflation. AUSTRALIA IN THE GLOBAL ECONOMY 15.1, 15.2, 15.3 first two dot points only knowledge of DMO not required) 15.4 Overview of Monetary, Fiscal and Micro economic reform Policy The role of monetary and fiscal policy in managing inflation (demand-pull), unemployment (structural and cyclical) and economic growth. Basic coverage of policy conflicts. Basic overview of micro economic reform – aims only. The policy mix AUSTRALIA IN THE GLOBAL ECONOMY Section 8.6, 9.4, 13.4, 13.5, 14.6, 15.4, 15.5 and 16.1 Tasmanian Qualifications Authority Version 1 Publication: 6 March 2016 Economics 7 3. AUSTRALIA AND THE WORLD ECONOMY Australian trade Trade Why does Australia trade with other economies? Refer to employment, income, choice, economies of scale, access to resources, specialisation and resource allocation Comparative Advantage. (Theory only, no calculations) AUSTRALIA IN THE GLOBAL ECONOMY Section 2.1 Trade Protection and reform Reasons for trade protection Trade protection using tariffs, subsidies and quotas. (including diagrams) The implications of reducing protection for Australia AUSTRALIA IN THE GLOBAL ECONOMY Section 2.2, 2.3, 6.1, 6.2, 6.3 and 6.4 Exchange rates Define floating exchange rate. Define appreciation and depreciation of a floating exchange rate. What are the causes of an appreciation/depreciation of a floating exchange rate? Refer to supply and demand. What are the effects of an appreciation/depreciation of a floating exchange rate? What is the TWI (simple coverage only) AUSTRALIA IN THE GLOBAL ECONOMY section 5.1, 5.2 and 5.5 Australia’s Balance of Payments The balance of payments Brief overview of the two accounts. Focus on trade balance and income accounts. No calculations required. Very basic coverage of capital and financial account only (as per text glossary) AUSTRALIA IN THE GLOBAL ECONOMY section 4.4 The Current Account Deficit What is a current account defict and foreign debt? What are the consequences of a high current account deficit and foreign debt? Include impact of debt servicing, Also include alternate view that debt is not a problem. AUSTRALIA IN THE GLOBAL ECONOMY section 4.4, 4.5 and 4.8 Globalisation Globalisation and Development Define and differentiate globalisation and development Differences in economic development including HDI and standard of liv ing. AUSTRALIA IN THE GLOBAL ECONOMY 3.1, 3.2 and 3.3 Tasmanian Qualifications Authority Version 2 Publication: 6 March 2016 8 Economics The impact of globalisation Brief overview of the impact of globalisation on economic growth, economic development, international trade, inequality and the environment. AUSTRALIA IN THE GLOBAL ECONOMY 3.5, 3.6 RESOURCES Below is a list of some of the many resources available. Text Books Dixon, T.& O’mahony, J. The Market Economy Year 11 Preliminary Economics 2010 edition, Australia, Leading Edge Education Dixon, T.& O’mahony, J. Australia in the Global Economy Year 12 HSC Economics 2010 edition, Australia, Leading Edge Education McConnell, J. & Smith, W. Economic Activity Book 1 3rd ed Australia, Macmillan McConnell, J. & Nailon, K. Economic Activity Book 2 7th ed Australia, Macmillan Morris R. ECONOMICS DOWN UNDER BOOK 1 - VCE ECONOMICS UNITS 1&2 6ED Australia Jacarana Morris R. ECONOMICS DOWNUNDER 5ED VCE ECONOMICS UNITS 3&4 Australia Jacarana Parry, G & Kemp, S. PATHWAYS IN ECONOMICS.Australia Tactic Publications. Wallace, D. Macquarie Revision Guides HSC Economics Australia Macmillan WorkBooks The Market ECONOMY Year 11 Preliminary Economics Workbook Third Edition Australia Leading Edge Dixon, T & Astron Douglas, A & O'Mahony, J & Truswell, E AUSTRALIA IN THE GLOBAL ECONOMY Year 12 HSC ECONOMICS COURSE WORKBOOK Fourth EDITION Australia Leading Edge Journals EcoDate COMPAK (published by VCTA) Current Economics Websites The Age. www.theage.com.au/ Austrade: www.austrade.gov.au Tasmanian Qualifications Authority Version 1 Publication: 6 March 2016 Economics 9 Aust. Bureau of Statistics: www.abs.gov.au The Australian Financial Review www.afr.com/ Australian Competition and Consumer Commission www.accc.gov.au/ Australian Government, The Treasury www.treasury.gov.au/ Current exchange rate: www.xe.com Current Federal Budget. www.budget.gov.au/ Department of Foreign Affairs & Trade: www.dfat.gov.au/trade Economist.com www.economist.com/ Environment Australia: www.environment.gov.au Make Poverty History Campaign: www.makepovertyhistory.org MrWood Commerce Education www.MrWood.com.au Reserve Bank of Australia: www.rba.gov.au United Nations Environment Network: www.unep.net Victorian Commercial Teachers Association www.vcta.asn.au/ World Bank: www.worldbank.org World Trade Organisation: www.wto.org Tasmanian Qualifications Authority Version 2 Publication: 6 March 2016 10 Economics FORMULAS 1. Unemployment rate (%) 2. Labour Force Participation Rate (%) 3. Economic Growth (%) 4. Inflation Rate (%) 5. Multiplier Tasmanian Qualifications Authority Version 1 Publication: 6 March 2016 Economics 6. 11 Increase in Income Tasmanian Qualifications Authority Version 2 Publication: 6 March 2016