The focus of this topic is an examination of Australia’s place in the global economy and the effect of changes in the global economy on Australia.
A student: H1 demonstrates understanding of economic terms, concepts and relationships H2 analyses the economic role of individuals, firms, institutions and governments H4 analyses the impact of global markets on the Australian and global economies H5 discusses policy options for dealing with problems and issues in contemporary and hypothetical contexts H7 evaluates the consequences of contemporary economic problems and issues on individuals, firms and governments H8 applies appropriate terminology, concepts and theories in contemporary and hypothetical economic contexts H9 selects and organises information from a variety of sources for relevance and reliability H10 communicates economic information, ideas and issues in appropriate forms H11 applies mathematical concepts in economic contexts H12 works independently and in groups to achieve appropriate goals in set timelines.
Students learn to:
Examine economic issues
•assess the impact of recent changes in the global economy on Australia’s trade and financial flows •examine the effects of changes in trade and financial flows on Australia’s economic performance •analyse the effects of changes in the value of the Australian dollar on the Australian economy •discuss the impact of free trade and protection policies on the quality of life in Australia •propose likely changes to the structure of industry within Australia as a result of current trends in the global economy
Apply economic skills
•calculate the main components of Australia’s balance of payments •analyse the relationship between the balance of the capital and financial account and the net income balance •explain the relationship between the current account balance and the balance of the capital and financial account •use supply and demand diagrams to explain how the value of a currency is determined under different exchange rate systems •analyse the impact of changes in the components of the balance of payments on the value of the Australian dollar
Students learn about:
Australia’s trade and financial flows
Value, composition and direction of Australia’s trade and financial flows •trends in Australia’s trade pattern •trends in financial flows – debt and equity
Australia’s Balance of Payments •structure –Current Account, debits and credits –Capital and Financial Account •links between key Balance of Payments categories •trends in the size and composition of Australia’s Balance of Payments –international competitiveness, terms of trade, international borrowing, foreign investment –effects of these trends on Australia’s Balance of Payments
• measurement of relative exchange rates – to other individual currencies – Trade Weighted Index • factors affecting the demand for and supply of Australian dollars • changes in exchange rates – appreciation/depreciation • determination of exchange rates including fixed, flexible and managed rates • the influence of the Reserve Bank of Australia on exchange rates • the effects of fluctuations in exchange rates on the Australian economy
Free trade and protection
• Australia’s policies regarding free trade and protection • Australia’s multilateral and bilateral free trade agreements – (overview of two examples of each type of agreement) • the implications of Australia’s policies for individuals, firms and governments • implications for Australia of protectionist policies of other countries and trading blocs.