Economics · QCAA

Start free — no credit card needed Browse the full syllabus

Full Economics syllabus

Drill from units to topics, subtopics and individual learning objectives. Every LO is wired up to AI-marked practice questions.

100 LOs

▶1 — Markets and models34 LOs

▶The basic economic problem10 LOs

●Analyse and evaluate the production possibility curve to show the effects of different economic events, e.g. improvements in health, education or productivity of labour, asymmetric technology advances, war and famine.

●Classify the factors of production (land, labour, capital and entrepreneurial ability) and link these to income (rent, wages, interest and profit).

●Create responses that communicate economic meaning using data, information, graphs and diagrams in paragraphs and extended responses to suit the intended purpose. Economics 2025 v1.4

●Describe key concepts using economic terminology, including the ceteris paribus assumption, choice, economic growth, economic resources, efficiency, factors of production, opportunity cost, production possibility curve (frontier), productivity and scarcity.

●Describe the basic economic problem of relative scarcity and the need for decision-making by individuals, businesses and governments at local, state, national and international levels.

●Explain - ways that an economy attempts to solve the economic problem by considering the three basic economic questions — ‘what and how much to produce’, ‘how to produce’ and ‘for whom to produce’ - the distinction between efficiency (use of resources) and equity (who owns the resources).

●Explain the concept of models in economics and how making assumptions aims to simplify and identify complex economic relationships.

●Explain the concept of opportunity cost and recognise its significance in decision-making, where benefits are subjectively measured against costs.

●Identify assumptions and use the production possibility curve to explain, by illustrating in diagrammatic form, the concepts of scarcity, choice, opportunity cost, trade-offs, underutilisation of resources, efficiency, productivity, unemployment and economic growth.

●Select data and information to analyse and evaluate the ways that different economic systems attempt to resolve the three economic questions, using real-world examples, e.g. Norway, Singapore, North Korea, Cuba, China, Saudi Arabia, United States and the United Kingdom.

▶Economic flows8 LOs

●Analyse and evaluate how current and topical economic events affect various economic flows, e.g. changes to confidence levels; minimum wage; government subsidies to an industry (e.g. renewable energy, mining or agricultural); currency movements; or economic conditions in a major trading partner.

●Analyse and evaluate outcomes from changes in economic flows to make a decision about the past, present or future.

●Construct the five-sector circular flow of income model and explain the significance of its assumptions. The diagram shows withdrawals (Savings (S), Taxation (T) and Imports (M)) in one area, with injections (Investment (I), Government Expenditure (G) and Exports (X)) in the opposite area.

●Create responses that communicate economic meaning using data, information, graphs and diagrams in paragraphs and extended responses to suit the intended purpose.

●Describe key concepts using economic terminology, including aggregate demand, aggregate supply, circular flow of income model, consumption, exports, government expenditure, gross domestic product (GDP), imports, investment, subsidy and taxes.

●Explain the - relationship existing between the five sectors of the circular flow of income model in closed and open form, in both words and diagrammatic form - components of aggregate demand: Consumption + Investment + Government Expenditure + net exports (Exports – Imports), or C + I + G + (X – M) - equilibrium condition, where injections equal withdrawals, and understand why equilibrium is not where S = I and T = G and M = X - connection between aggregate demand and GDP, and locate GDP on the Australian Bureau of Statistics website - connection between the resources and goods markets, and the business and household sectors in the circular flow of income model - economic cycle (business cycle) with booms and busts, and how the government can minimise fluctuations in the economic cycle (the level of complexity is less than the requirement for Units 3 and 4) - paradox of thrift (fallacy of composition) exposed by the circular flow of income model.

●Explain the effects of changes in the factors of aggregate supply to the circular flow of income model (e.g. technology, innovation, entrepreneurship and immigration) and make connections to the production possibility curve, economic growth and employment. Economics 2025 v1.4

●Select data and information to analyse (the level of complexity is less than the requirement for - the various forces impacting on the size of the circular flow of income, e.g. retail sales growth, business investment, exports and imports using current data from the Australian Bureau of Statistics - the effects of government spending and taxation on the size of the economy using aggregate demand and the circular flow of income model - the effects of changes in the cash rate by the Reserve Bank of Australia on aggregate demand and the circular flow of income model and explain the meaning of basis points and percentage points.

▶Market forces16 LOs

●Analyse market situations that are not in equilibrium in the short term, and express graphically to demonstrate shortage and surplus (i.e. the operation of the ‘invisible hand’ as explained by Adam Smith).

●Analyse the impact of non-price factors on demand and supply curves, and equilibrium price and quantity in various situations, with diagrams. Challenging economic problems and application of economic theory can be considered, e.g. how housing prices increase despite increases in supply, or how Valentine’s Day flowers increase in price despite a significant increase in supply of flowers.

●Analyse the significance of price elasticity of demand to consumers, business and government.

●Analyse the significant components within a specific market to explore trends in prices and the relationships between supply and demand and the impacts upon price and quantity.

●Calculate - the percentage change in prices from one period to the next, using the calculation for change - the price elasticity of demand using the total revenue and/or point method, explain the numerical values, and relate to real economic scenarios.

●Create responses that communicate economic meaning using data, information, graphs and diagrams in paragraphs and extended responses to suit the intended purpose.

●Describe key concepts using economic terminology, including consumer sovereignty, elasticity, equilibrium, the law of demand and the law of supply.

●Describe the different characteristics of goods and services, including private, public, merit, substitute and complementary.

●Distinguish movements along from shifts of demand and supply curves; express each graphically and explain the impact on equilibrium price and quantity.

●Evaluate the effects of market forces on consumers and businesses.

●Explain - price elasticity of demand and the difference between elastic, inelastic and unitary elasticity, construct appropriate diagrams and apply to various situations - the factors affecting elasticity of demand, including necessities and luxuries, the existence of substitutes, the proportion of income spent on the good, and the length of time following a price change. Economics 2025 v1.4

●Explain and apply the theory of demand and supply to determine market equilibrium and express in diagrammatic forms.

●Explain price elasticity of supply, and elasticities of demand (income and cross).

●Explain the concepts of a market and of consumer sovereignty.

●Explain the significance of the ceteris paribus assumption with respect to the law of demand and supply

●Select data and information to investigate how the price mechanism operates within a specific market.

▶2 — Modified markets26 LOs

▶Markets and efficiency9 LOs

●Analyse the differences between complete market failure (missing markets) and partial market failure.

●Compare optimal versus socially desirable outcomes.

●Create responses that communicate economic meaning using data, information, graphs and diagrams in paragraphs and extended responses to suit the intended purpose.

●Describe key concepts using economic terminology, including allocative efficiency, productive efficiency, dynamic efficiency, externalities, incentives, market failure, monopolistic competition, perfect competition, oligopoly, monopoly, goods (public, private, merit and demerit), and market signals.

●Describe the - meaning of allocative, productive and dynamic efficiency as these relate to the optimal operation of markets - economic forces that limit perfect competition and foster an oligopoly market structure in many Australian industries.

●Explain different methods of market modification required to correct market failure, including direct and indirect taxation (e.g. Pigouvian taxes), subsidies, price floors/ceilings. Examples of different methods are suasion, tradable permits or direct state provision and regulation.

●Explain the causes and effects of market failure in at least one of the following situations - how market power may create a loss of market efficiencies - the ‘tragedy of the commons’ as it relates to common resources and the problem of ill- defined property rights, e.g. oceans and the atmosphere - how the lack of common ownership and the problems associated with global coordination limit government options when modifying markets, e.g. global warming and space junk in the outer atmosphere - asymmetric (imperfect) information that could lead to a misallocation of resources, e.g. adverse selection such as in the market for used cars (lemons), and moral hazard - how the features and characteristics of the extension of property rights may resolve economic inefficiencies associated with common resources, e.g. economic exclusion zones and economic zones in national parks. Economics 2025 v1.4

●Explain the causes and effects of market failure, including - how the excesses of boom and bust cycles in economic growth may result in suboptimal and socially undesirable outcomes - the concepts of positive and negative externalities of production and consumption with a diagrammatic representation of the welfare loss/benefit associated with them - the difference between public goods (e.g. fresh air, national security, street lighting) and private goods, why markets might not adequately provide public goods and the concept of the free rider problem - ways in which the immobility of factors of production might lead to the misallocation of resources.

●Select data and information to analyse and evaluate - strategies to mitigate market failure, to improve equity or efficiency within the economy, including the creation of opportunities for innovation - the tension between costs to individuals and society of market failure - intended and unintended consequences of possible mitigation methods.

▶Case options of market measures and strategies17 LOs

●Analyse and evaluate environmental economic issues, e.g. - the private/social costs versus private/social benefits of environmental degradation to determine socially optimal levels of production and/or consumption, in words and diagrammatic forms - government strategies and/or interventions to redress environmental degradation and significant measures to achieve economic and ecological sustainability, e.g. a carbon tax and other fiscal methods to reduce emissions, quotas on resource extraction, and rehabilitation charges.

●Analyse and evaluate inequality issues, e.g. - the private and social costs and benefits of pursuing a redistribution of income and wealth, e.g. taxation, transfer payments, subsidisation of merit goods and other assistance - government strategies and/or interventions to address inequality and measures aimed at alleviating inequality and improving living standards, e.g. taxation, transfer payments, subsidising of merit goods and other assistance.

●Analyse and evaluate market concentration issues, e.g. - private and social costs and benefits of concentrated markets (e.g. under-provision of goods, and positive and negative externalities), and support with diagrams - the role of the Australian Competition and Consumer Commission (ACCC) and the courts in reducing anticompetitive behaviour - government strategies and/or interventions to increase competition in markets to achieve more efficient market outcomes, e.g. in oligopolistic industries such as banking, grocery and petroleum, and considering different perspectives.

●Create responses that communicate economic meaning using data, information, graphs and diagrams in paragraphs and extended responses to suit the intended purpose.

●Create responses that communicate economic meaning using data, information, graphs and diagrams in paragraphs and extended responses to suit the intended purpose. Case option C: Inequality

●Create responses that communicate economic meaning using data, information, graphs and diagrams in paragraphs and extended responses to suit the intended purpose. Economics 2025 v1.4 Case option B: Environmental economics

●Describe a range of measures and indicators of inequality, e.g. the Lorenz curve, Gini coefficient, Henderson poverty lines, household income, mean and medium income, and equivalence scales.

●Describe and explain the meaning of ecologically sustainable development relating to allocative, productive and dynamic efficiency.

●Describe and explain the meaning of market concentration and market power, and consider allocative, productive and dynamic efficiency as these relate to the desirable operation of markets.

●Describe key concepts using economic terminology, including absolute and relative poverty, egalitarian society, income, transfer payments, wealth, and the welfare state.

●Explain how market concentration can change over time resulting in changes to market structure, including perfect competition, monopolistic competition, oligopoly and monopoly. Diagrammatic analysis is an optional extension.

●Explain the - environmental impacts of economic activities - trade-off between economic growth and ecologically sustainable development, e.g. the environmental performance index; the environmental Kuznets curve (the optimism bias of ‘grow now and clean later’) - challenge of valuing externalities and ensuring these are reflected in market prices.

●Explain the causes of inequality of income and wealth in Australia (e.g. educational attainment, employment status, gender, age, occupation, ethnic background, uneven distribution of factors of production, and family structure) and other factors that impact particular groups in society, e.g. Australian Aboriginal peoples and Torres Strait Islander peoples, migrants, and people living with disabilities.

●Explain the impact of competitive pressures on innovation and investment, resource allocation and market efficiency, using economic reasoning.

●Select data and information from sources that offer evidence of environmental degradation in Australia (e.g. climate change, depletion of natural resources in the long term and deterioration of common access resources), and examine these sources to appreciate their underlying assumptions and perspectives.

●Select data and information from sources that offer evidence of the consequences of inequality in Australia and examine these sources to appreciate their underlying assumptions and perspectives.

●Select data and information that offer evidence of concentrated markets in Australia and other countries (e.g. banking, grocery and petroleum industries), and examine these sources to appreciate their underlying assumptions and perspectives.

▶3 — International economics19 LOs

▶International trade12 LOs

●Analyse the composition and direction of Australia’s trade patterns (e.g. the five largest importers and exporters), compare them to emerging patterns and trends in international trade, and calculate the percentage change from one period to the next.

●Comprehend and describe key concepts using economic terminology, including absolute advantage, comparative advantage, competitive advantage, currency devaluation, currency revaluation, economic integration, economic union, exchange rate appreciation and depreciation, external stability, internal stability, factor endowment, exchange rates (fixed, floating and managed), free trade, sustainable economic growth, trade liberalisation, balance of payments, balance of trade, capital and financial account, current account deficit, current account, foreign investment, foreign debt, and terms of trade.

●Comprehend and explain the advantages and disadvantages of international trade, and how trade can impact economic policy, including sustainable economic growth, and external and internal stability.

●Comprehend and explain the development and contemporary relevance of trade theories, including the economic theories of absolute (see Adam Smith), comparative (see David Ricardo) and competitive advantage (see Michael Porter), and apply these theories using relevant diagrams and models.

●Comprehend and explain the factors underlying the demand and supply of the Australian currency and how a floating exchange rates insulates the Australian economy from external shocks.

●Comprehend and explain the significance of foreign investment to Australian economic development, e.g. to finance mining booms. Economics 2025 v1.4

●Comprehend the concept of an open economy to explain how it operates in terms of the circular flow of income model.

●Comprehend, explain and classify a country’s international transactions into current and capital account statements.

●Comprehend, explain and construct diagrams applying demand and supply factors in a floating exchange rate system.

●Create responses that communicate economic meaning using data, information, graphs and diagrams to suit the intended purpose in paragraphs and extended responses.

●Select data and information to analyse and evaluate - effects of changes in Australia’s terms of trade on the economy from a range of perspectives - causes of exchange rate appreciation or depreciation movements - government policy responses to exchange rate movements and changing trade relationships using criteria e.g. employment in trade-exposed industries, economic growth (nationally or in state or local regions), efficiency (allocative and dynamic costs), and importation of goods and services.

●Select data and information to analyse and evaluate - patterns of Australia’s balance of payments including the current account and balance of trade over the last 5 or 10 years, including the percentage change - cyclical and structural causes and effects of Australian current and capital account trends - the significance of movements within the balance of payments on the domestic economy, from a variety of perspectives, e.g. import and export suppliers, and buyers - the significance of Australia’s foreign debt position and foreign investment longitudinally.

▶Global economic issues7 LOs

●Analyse and evaluate the economic arguments for and against protectionism and trade liberalisation responses from different viewpoints using economic criteria (e.g. economic efficiency, economic growth, living standards or resource allocation) to make a decision about the past, present or future regarding the relative merits of trade policy alternatives.

●Analyse and evaluate the economic outcomes of international trading bloc agreements (e.g. Australia–New Zealand Closer Economic Relations Trade Agreement (CER), European Union (EU), North American Free Trade Agreement (NAFTA), ASEAN–Australia–New Zealand Free Trade Agreement (AANZFTA)) on Australian economic growth, and decide on the net benefits using economic criteria, e.g. economic efficiency, economic growth, living standards or resource allocation.

●Create responses that communicate economic meaning using data, information, graphs and diagrams in paragraphs and extended responses to suit the intended purpose.

●Describe key concepts using economic terminology, including methods of trade protection, economic integration, economic union, globalisation and trade liberalisation.

●Explain - bilateral, regional and multilateral trade agreements that involve Australia - the contemporary role of ‘free trade’ agreements and their impact on Australia’s international trade, including trade creation and trade diversion.

●Explain the methods of protection employed by nations, and construct supply and demand diagrams to demonstrate the effect of methods of trade protection, including tariffs and non- tariff barriers (e.g. subsidies, quotas and bureaucratic requirements).

●Explain, analyse and evaluate the - factors that have contributed to the growth of multi-company and multinational supply chain integration, e.g. the location of natural factor endowments; digital and other innovation; infrastructure (including logistics); and government incentives - factors that have contributed to globalisation and current international trade patterns, including technology; multi-national corporations; regional trading blocs; and deregulation of financial capital markets and of non-government institutions, e.g. the World Trade Organization, International Monetary Fund and World Bank

▶4 — Contemporary macroeconomics21 LOs

▶Macroeconomic objectives and theory7 LOs

●Comprehend and describe key concepts using economic terminology, including basis point and percentage point changes; consumer price index; deflation; labour force underutilisation; average propensities to consume and save; non-accelerating inflation rate of unemployment; participation rate; percentage change; stagflation; structural deficit.

●Comprehend and explain - cyclical and structural factors affecting movements and shifts of short- and long-run aggregate demand and supply - the factors affecting the production possibility curve - the concept of the multiplier effect and calculate the value of the simple Keynesian multiplier, in terms of the marginal propensity to consume and save - the four phases of the economic cycle, in the context of macroeconomic objectives - the macroeconomic objectives of sustainable economic growth: full employment; price stability; external stability; sustainable development; and improved living standards - how interest rates and federal budget decisions are policy tools that influence economic growth.

●Comprehend and explain causes, effects, benefits and costs of the following to different groups and economic agents - sustainable economic growth - unemployment, including cyclical, structural, frictional, seasonal, natural, hidden, long-term and underemployment - inflation, including headline, underlying, demand-pull, cost-push, imported and inflation expectations.

●Comprehend and explain the role in fiscal policy of automatic stabilisers and the role of discretionary spending in influencing aggregate demand and stabilising the economic cycle, and apply using diagrams. Economics 2025 v1.4

●Comprehend the circular flow of income model and the components of aggregate demand, focusing on economic policy decisions.

●Comprehend, explain and apply the aggregate demand/aggregate supply model to determine the overall price level and equilibrium level of real output in an economy.

●Distinguish nominal and real gross domestic product, wages and interest rates, and use calculations to identify change and scale.

▶Economic indicators and past budget stances5 LOs

●Calculate the rate and changes of economic data, including real economic growth, inflation, the rate of unemployment, and the participation rate.

●Create responses that communicate economic meaning using data, information and diagrams to suit the intended purpose in paragraphs and extended responses that form an analytical essay format. Economics 2025 v1.4

●Explain and categorise economic indicators of past economic performance, including leading, lagging, and coincident indicators, using current data from objective sources, e.g. the Australian Bureau of Statistics and the Reserve Bank of Australia.

●Select data and information to analyse and evaluate - past economic indicators, to assess the position of the Australian economy on the economic cycle at previous points in time - the relationship between the economic cycle and economic objectives using past economic indicators and trade-offs, including conflicting objectives, intertemporal relationships, and the short- and long-run Phillips curve.

●Select data and information to analyse and evaluate - the accuracy, reliability and efficacy of common indicators used to measure economic objectives in a past scenario - recent Australian federal budget outcomes including cyclical and structural causes and effects of expansionary and contractionary fiscal policy stances within the last 3–10 years - the Australian Government’s economic management and achievement of its macroeconomic objectives for a period within the last 3–10 years.

▶Economic management9 LOs

●Analyse and evaluate the impact and/or effectiveness of fiscal policy responses to achieve Australia’s economic objectives in the future. Sub-topic B: Demand management policies — monetary policy

●Analyse and evaluate the impact of and/or effectiveness of policy responses to achieve Australia’s economic objectives.

●Comprehend and describe the nature and aims of aggregate supply policies (including microeconomic reforms) and explain their relationship to domestic macroeconomic objectives.

●Comprehend and explain a rationale for the government to - develop and implement economic policies that consider efficiency, equity and trade-offs - stabilise the economic cycle and attain a range of economic objectives including sustainable economic growth; economic prosperity and wellbeing; internal stability; external stability.

●Comprehend and explain demand management and supply side policies and their limitations including structural deficits, time lags, global influences and political constraints. Sub-topic A: Demand management policies — fiscal policy

●Comprehend and explain how a government policy focused on a supply side improvement can impact Australia’s economic growth through productivity, efficiency or competitiveness, using infrastructure; education and training; research and development; innovation, and deregulation.

●Comprehend and explain the role of the Reserve Bank of Australia (RBA) and the objectives of monetary policy as outlined in its charter.

●Comprehend and explain the sources of government revenue (direct and indirect taxation; progressive, proportional, and regressive taxation) and the components of government expenditure (current, capital and transfer payments; public utilities and merit goods) in the federal budget.

●Comprehend, explain, analyse and evaluate the - concept of inflation targeting and the significance of monetary policy on the level of economic activity, and include a discussion of percentage change and basis point change - transmission mechanism and channels of monetary policy, and their influence on the level of aggregate demand - impact on and/or effectiveness of monetary policy responses to achieve Australia’s economic objectives. Sub-topic C: Supply side and microeconomic policies

Ready to practise Economics?

Adaptive and custom practice tied to QCAA mark schemes. Free to start, no credit card needed.

Start free practice